credit crunch to bring down LTVsLoan-to-value (LTVs) ratios are likely to fall this year as mortgage providers take a more cautious approach to lending, the Royal Institute of Chartered Surveyors (Rics) has warned.

Responding to figures from the Council of Mortgage Lenders (CML), Rics said LTVs would be one of the areas hit by the credit crunch.

Lower LTVs will see lenders demand larger deposits, which could be bad news for some borrowers, especially first-time buyers.

"The tougher lending environment is likely to be particularly problematic for first time buyers," Rics said.

"Lower interest rates may provide some help as far as financing a mortgage is concerned but with many lenders scaling back on loan to value ratios, the need to find even larger deposits could prove a more powerful obstacle for those hoping to take their first step on the property ladder."

Investor buyers are less likely to be concerned by the need for larger deposits as they often have a substantial amount of cash to put down.

In fact, some investors could profit from the difficult market, as vendors become jittery.


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