The fluctuating nature of the mortgage market continued to generate news last week, with the final 100 per cent mortgage withdrawn by Abbey on Tuesday. Although existing applications will be honoured, it is now currently impossible to find a full-value mortgage on a property, as banks reduce their lending criteria to the public.

Abbey described their decision to withdraw the last 100 per cent mortgage deal in the UK as "normal", adding "Abbey is seeing high demand following recent competitor moves. In order to maintain high service levels on the business it writes, it is simplifying its mortgage range and re-pricing in some areas." With other companies doing the same, the total number of mortgages now available in the UK has dropped to 2,058, compared to 3,370 this time last year.

This reticence to lend customers money stems from the fact that banks are struggling to leverage money for new loans and mortgages, especially since they are now reluctant to lend to each other, which has traditionally sustained the commercial lending markets. Only two months ago, it was possible to obtain a 125 per cent mortgage, but now any home purchaser will require a deposit to be given funding, and even 95 per cent mortgages are becoming scarcer by the day. Brokers Chase de Vere predicted last Tuesday that ten to 15 per cent deposits will soon become the norm.
 
The best advice to would-be house hunters is to keep a close eye on the market. Just last week, HSBC offered to match the existing deals of anyone whose fixed-term mortgage is drawing to a close for up to two years, subject to fees. Meanwhile, other lenders may re-introduce 100 per cent loans, but with caveats, such as the currently-available Bristol & West mortgage for a property's full value, available to people whose parents are prepared to pay any outstanding amount in the event of a mortgage default.