"We have therefore withdrawn new mortgage and remortgage products across our residential range with a loan to value ratio of over 60%."
Lloyds Banking Group has withdrawn all residential purchase and remortgage products above 60% LTV across its intermediary brands – Halifax Intermediaries, Scottish Widows Bank and BM Solutions – in response to the Covid-19 outbreak.
Product transfers and further advance products remain unchanged and customers can still apply for a mortgage directly online with Halifax and Lloyds Bank.
In an email to brokers, Halifax said: “The Covid-19 situation is changing on a daily basis and we continue to adapt our service to ensure continued support.
“This has had a direct impact on our available processing resource and we have therefore withdrawn new mortgage and remortgage products across our residential range with a loan to value ratio of over 60%.
“We will also continue to focus on our existing Halifax customers and support them with payment holiday arrangements for financial support.
“This is very much a temporary move while we deal with the current situation and we will keep you updated regularly."
Andrew Montlake, managing director of Coreco, commented: “The Halifax’s decision to stop lending above 60% LTV reflects the wholesale recalibration of risk that is unfolding in the mortgage market.
“Not since the Credit Crunch have we seen lenders make such a flight to quality in limiting products to 60% LTV and below.
“In these unprecedented times, lenders, like a significant percentage of the world’s population, are going into lockdown.
“The decision of the Halifax is part logistics, of course, but to stop lending above 60% shows the seriousness with which it is taking Covid-19.
“With physical valuations on hold, for many lenders 60% LTV is the level at which they can engage their Automatic Valuation Models effectively from a risk perspective and process cases without too much human intervention.
“The issue will be that many remortgage customers may be forced to either stay with their existing lender or revert to more expensive standard variable rates until this crisis is over.
“The hope is that the mortgage market rebounds as fast as it is deteriorating once we come out the other side of Covid-19.”