Lloyds, Mortgage Advice Bureau: Are these FTSE stocks good bets now?

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Lloyds, Mortgage Advice Bureau: Are these FTSE stocks good bets now?

 Lloyds, Mortgage Advice Bureau: Are these FTSE stocks good bets now?
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Highlights

  • Mortgage affordability tests in the UK are all set to be tightened up, impacting the size of loans homebuyers can take.
  • The tightening in mortgage lending happening now is the biggest such tightening since 2009 as interest rates are going up along with the escalation of a significant cost-of-living crisis.

With the cost-of-living crisis escalating in the UK amid rising inflationary pressure and other issues, the struggles of homebuyers are all set to increase further. Banks are beginning to make alterations to the amount that they lend to the homebuyers taking out a mortgage, which would in turn impact the size of their loans.

The mortgage affordability tests would be tightened by the banks, which would make it even tougher for UK homebuyers to borrow. High NI charges, soaring energy bills, and other inflationary pressures have altogether burdened the budgets of households, which would now be struggling to buy homes. As per reports, several mortgage brokers have said that big players like Lloyds and NatWest would also eventually follow the trend.

The tightening in mortgage lending at present is the biggest such tightening since 2009 as interest rates are going up along with the escalation of a significant cost-of-living crisis. As the affordability tests would get stricter, the buyers would have to reduce the size of their loans along with the size of their houses. This is expected to bring about a slowdown in the property market.

Here are 3 FTSE-listed stocks that investors can keep an eye on.

RELATED READ: Which FTSE stocks you should look at amid stagflation fears in UK?

Lloyds Banking Group PLC (LON: LLOY)

The shares of the UK-based retail and commercial banking group, Lloyds Banking Group plc, were down by 0.27% at 8:01 AM (GMT+1) on 13 April 2022, at GBX 44.00. The FTSE 100 bank has given its shareholders a return of 0.98% over the last one year as of 13 April 2022. The current market cap of the company stands at £30,862.35 million.

Mortgage affordability tests to be tightened leading to difficulty for homebuyers

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NatWest Group plc (LON: NWG)

The shares of the National Westminster Bank, which is a leading British retail and commercial bank, were up by 0.28% at 8:07 AM (GMT+1) on 13 April 2022, at GBX 216.60. The FTSE 100 bank has given its shareholders a return of 9.10% over the last one year as of 13 April 2022. The current market cap of the company stands at £22,883.47 million.

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Mortgage Advice Bureau (Holdings) Plc (LON: MAB1)

The shares of the British non-trading holding company which provides customers with expert mortgage advice, Mortgage Advice Bureau (Holdings) Plc, were trading at GBX 1,285.00 8:10 AM (GMT+1) on 13 April 2022. The FTSE AIM UK 50 Index constituent has given its shareholders a return of 4.90% over the last one year as of 13 April 2022. The current market cap of the company stands at £732.63 million.

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