UK mortgage lenders are penalising buyers of new-build housing by offering much poorer terms than for second-house houses. Major lenders including Nationwide, Abbey, Cheltenham Gloucester and Alliance Leicester are now either restricting mortgage offers or offering different rates for some or all new-build properties. Hardest hit are buy-to-let mortgages for new-build flats; a number of lenders are refusing to lend at all to these customers. A spokesperson for Nationwide said the building society had restricted the loan-to-value ratio on new-build flat purchases to 75, and on new-build homes to 90. This compares with a rate of 95 on second-hand homes. They have also revised their valuation procedure for new-build homes. The spokesperson said: "There has been over-supply, and we have to protect ourselves and our borrowers against falls in property value."
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