Only 25% over valued? HSBC's chief economist wrote that prices were 30% over valued in November '07 actually.

This tightening of lending can only be a good thing for future first time buyers and will hopefully stop people overstretching themsleves in the vain hope of being able to buy a lousy little 2 bed terrace house in some run down neighbourhood crime hotspot - why the rush people??

As for the 'bank of mum and dad' helping out the kids with buying, they are just helping to prolong the problem as well as risking their own little nest egg which should be saved for retirement (and they're going to need it the way Gordon Brown has handled things!)

Kong, Manchester, UK

Zero deposit mortgages were what enabled property prices to be uncoupled from income and unaffected by increasing stamp duties and conveyancing costs, plus the rising market meant zero-depositors could have equity in their homes within a few months so could borrow with abandon. A 10% deposit, plus stamp duty and legal costs means the average buyer would need nearly the average annual income in cash....and very few people, let alone first time buyers, have that kind of cash. Over-leveraged homeowners and estate agents with their heads in the sand are really going to struggle finding buyers at the current asking prices if other mortgage lenders follow Lloyds.

Orson, abroad, UK

It is the curse of financial leverage. Banks want at least a 10% cushion against house price drop and negative equity. Clearly not very confident anymore that "prices can only go up"
Of course this will accelerate the crash

Richard, Maidenhead,

Maximum of 90% LTV will become the norm, so get used to it. Soon income multiples loaned will fall to four and possibly three.

Paul, Coventry,

Thank goodness. Hopefully this decision will help in ridding us of the more parasitic mortgage brokers, who have only really ever been in it for themselves. Prudence combined with fair longer term stable borrowing with the Banks being made to compete on fees, aswell as rate, should benefit all in the longer term.

Dev, Strathclyde,

I think it is prudent to require a 10 percent deposit. I would not advise lending money to someone who has not the discipline to save a deposit. It does not bode well for the future.

Paul, Blackpool,

This is GOOD for First Time Buyers!!!

A clear example of ANOTHER mortgage lender pricing in the inevitable house price correction.

Anything that prevents more hopless souls from financial oblivion is a good thing.

First Time Buyers really have the LEAST to lose the moment.

Matthew, Birmingham,

I have 30K saved for a deposit, which has taken me ten years to accrue since leaving university. This is more than a 10% deposit for the simple house I would like to buy for my family. But I'm not going to buy because house prices are out of control. Loose lending practices have caused the boom that precedes the bust. The tightening of lending criteria is a good thing for every person in this over-indebted country, perhaps with the exception of Gordon Brown, who let it all happen so that he could become Prime Minister.

Steve, Southampton, UK

Many of my friends are still buying houses with the help from their parents. Their parents are taking some money out of the family home by remortgaging and using this as a down payment on a property for their children. In one case, the parents are buying it for them and allowing them to rent it back from them, in effect covering the mortgage until such a time that they can take it on themselves. It seems that the house prices are not falling yet or owners are digging their heals in, so my friends have decided to buy now before the house prices start rising again in the Spring.

Chris, CAMBS, CAMBS

This isn't penalising first time buyers! It's saving them!
In a year's time when house prices are 15% down on today's "values" you'll be glad you didn't have that 10% deposit ready.

Frank Fielding, Oxford,

I think its a good news. This is a tell tell sign for house prices to come down in near future. It will be worth saving up for some time to snap a good deal.

NB, Camborne, Cornwall

Great news, I've been saving a deposit for 5 years and all I have seen is prices go through the roof due to increasingly loose lending. I'm glad the system changing back to advantage the prudent over the risk takers.

Gavin, London,

Joe, London, I believe Robert is referring to nationwide only offering their best rates to buyers with at least a 25% deposit. Look at the link in this article. Whatever the reason for their decision, lack of faith or not in the asst class, or difficulties selling the debt on, the consequence is much the same: a sudden break on cheap and easy credit. will inevitably mean a drop in house prices. Whilst in the short term this may be bad for the economy, cheaper prices may mean future purchasers wake up and find they have more money in their pockets to spend on themselves in the local economy. Living in Germany, with much lower property prices, lower rents, everyone's standard of living is higher. Here they even have Mercedes as taxis!! Maybe the myth of high house prices being good will be tested and found to be lacking..

Gareth Jones, Dusseldorf, Germany

Nikki: Don't worry, the prices will come down quickly now, and we first-time-buyers won't be penalised at all! Just wait.

And as to the specuvestors who will lose money now - why should we care about them? Cheers!

Sogy, Belfast, NI

Judy, last time I checked Lloyds wasn't run by the Labour party.

Paul, Cambridge,

All this will do is stop any but the middle class buying property. Haven't Labour done well for their poorer working class voters?.......Not.

judy, Liverpool, England

Robert -- the reason banks are asking for more equity is not because the do not beleive in the asset class. It is because the are having issues selling this debt on the secondary markets - it is wholesale market that has tighted the criteria which is now being reflected in the retail market.

by the way - where did you get 25% from? I would love to review the model you based your comments - do doubt is is less sound than a house build from jenga blocks.

Joe, London,

Will in Bristol, and the reason that such a high deposit is required is because irresponsible lending fanned the flames of ludicrous unsustainable house price hikes. The lenders are to blame for this and unfortunately now the market has to find it's natural level and then the deposit required will fit with what the market can truly afford and sustain.

I have every sympathy with someone attempting to get on the ladder but this has been coming for several years now, it was just a question of when.

Stewart, Twickenham,

Although anything which helps end the house price inflation has to be welcomed, the problem with this move by the lenders is that people forced to rent instead of buying will rarely be able to save the enormous deposits now required as they'll be handing over most of their money to vampire landlords.

Andrew, London, UK

I have asked for a three month payment holiday on my mortgage from C&G, and despite two letters they haven't even replied. That is despite my mortgage only representing about 60% of the value of my house! I am wondering if C&G are in trouble...

Ian, Wimbledon, England

As credit lending tightens then house prices have only one way to go and it's not up. Houses are probably overvalued by 25% even now. It's interesting that some of the bigger banks are now asking for 25% deposit (or equity) in the property. Clearly they are also thinking that house prices are over valued. They only care about getting their money back if it does all go horribly wrong.
Sit tight and wait.

Robert , Birmingham , UK

MB, Edinburgh I take it you all ready have a house then! I very much doubt that if you where on an average salary in this day, that you could raise £17,500 to pay a 10% deposit as first time buyer.

Will, Bristol,

I congratulate LTSB on this move. When I bought my first (and only) property back in 2000 I needed to stump up a 10% deposit and had to prove my income in order to get a 3.5x salary mortgage.

Keith from Swindon asks why first time buyers are being penalised. Keith - they're not! The banks are saving you from making the biggest mistake of your life if you're considering buying a property right now.

The only reason prices reached the ridiculous levels of 2007 was because of lax lending and cheap credit. Those days are thankfully over and I personally am very much looking forward to the future.... Average properties being affordable for average earners.

Rob, Surrey, UK

Its hard enough to get on the property ladder these days as it is and even with myself being a police officer and my friend a newly qualified teacher between us we are struggling to find a property no matter a company who will give us a mortgage, now with this news we will both be lucky if we can buy a property in the next ten years. I think this is just going to increase the numbers of young professionals having to rent on long term before being able to buy anything. It is a bit of a disgrace in my opinion where two young professionals have to wait until they have saved £17,000 at least (with property prices these days) just to get there foot in the door!

Nikki, Edinburgh,

Its about time we returned to the old fashioned bank manager
of the 1950's .

Chris Brown, Nottingham,

Why are first time buyers being penalised by these lenders? Are they saying there is an above average risk to default if you are a first time buyer? It is the sub-prime market that is causing problems. This move will seriously affect all homeowners with the ability to sell property severely curtailed. It is well known that first time buyers are crucial to the house buying chain and the health of the market in general. 95% mortgages have been available for years and are not responsible for the current malaise. Lenders who lent beyond 95% should be called to question. It was those irresponsible lending products that have contributed heavily to the mindset of have it all now, pay later. This move will now push builders and developers into more creative schemes to entice buyers with weird and wonderful part / shared / joint ownership offers all designed to hoodwink the lenders into believing the applicants have the required deposits.

Keith, Swindon, UK

We are back to where we were.
We puchased our house in 1964at 90% (10% as a bond).
We covered it with a 20 year, with profits, endowment for the mortgage price. At the end of 20 years the endowment amount would pay off the mrotgage. The accrued bonuses were an extra.
Perhaps if this system returns fewer people will fall behind with repayments.
It wasn't easy, in fact at times a real strruggle, but safer than overborrowing.#

Bryan , Grantham,

If you can't afford a 10% deposit, you shouldn't be buying in the first place. A deposit of 10% is the absolute minimum in the current stagnant / falling market. It's about time banks returned to such tried and tested lending criteria. Their deviation from these traditional criteria are what caused the unsustainable run-up in prices to begin with.

Prices will now ease back to trend i.e. 3 x average income and affordability will increase for responsible first-time buyers who have planned ahead and budgeted well.

MB, Edinburgh,

Lenders are becoming more risk adverse and the property boom was built on the opposite model.

The restriction and tightening of credit will see the end of house price inflation and property will return to a more sustainable level of affordability.

Its seems as though Gordon Brown’s casino economy is coming to an abrupt end as it starved of credit.

Ad, UK,

Thank goodness for common sense! At last. Maybe this move amongst lenders for caution will deter younger and not so much younger people into getting priorities right. At present we have a couple of generations of having it all on tick. If people prioritised their needs (not the two cars in the garage and 42" plasma on the wall, hi fi, numerous holidays abroad etc) but had to save for a deposit before moving into a fully equipped home in this I want it all and I want it now society, there would not be this current credit dilemma. In my father's day one had to put down a 30% deposit. Don't say, things were different then - he got 6d (2 1/2 p) for every hold he drilled in iron or to put dynamite in to blast out the iron for the steelworks and still managed to buy his first house for cash at £1000. Lets hope easy credit is over and values return.

Kallie, Kettering, UK