Since the beginning of the credit crunch, more than two years ago now, banks and building societies have continued to tighten their lending criteria dramatically and in particular the area of loan to value ratio’s has been severely restricted, with many lenders only offering a maximum of 75 per cent loan to value on their home owner loan and mortgage products.

Northern Rock were the first victim of the credit crunch, largely due to their high loan to value products such as their Together range, which offered loans of up to 125 per cent loan to value.

But the Coventry building society has just announced that it is to reintroduce a 125 per cent loan to value service for its existing borrowers. The new loans are designed to help existing Coventry customers, who may be in a negative equity situation with their current home owner loan due to falling property prices, to be able to move house.

The deal will not be available to everyone, in order to qualify, applicants must have an existing home owner loan with the society and have an excellent credit rating. It is designed to help those who have to move, due to things such as a growing family or job relocation and would otherwise be unable to do so because of negative equity on their existing loan.

Ray Boulger of the mortgage broker John Charcoal said “This new facility from Coventry Building Society for credit worthy existing mortgage customers, allowing them to move even if they have little of no equity in their property, is a superb example of a lender responsibly looking after its existing customers. It is really good to see a lender actually living up to its motto rather than just talking about it.”