U.K. mortgage lenders are quickly adjusting lending criteria to serve first time home buyers. For instance, HBOS and Abbey National this month announced plans to launch new, higher LTV mortgages aimed at these borrowers. However, going down this route has sparked concerns that lenders might be overstretched in the event of a market reversal.

Abbey plans to lend up to a five time multiple of a borrower's income while HBOS plans to offer mortgages of up to 125% LTV via the Halifax and specialist mortgage lender solutions brands.

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