UK mortgage lenders are penalising buyers of new-build housing by offering much poorer terms than for second-house houses.

Major lenders including Nationwide, Abbey, Cheltenham & Gloucester and Alliance & Leicester are now either restricting mortgage offers or offering different rates for some or all new-build properties.

Hardest hit are buy-to-let mortgages for new-build flats; a number of lenders are refusing to lend at all to these customers.

A spokesperson for Nationwide said the building society had restricted the loan-to-value ratio on new-build flat purchases to 75%, and on new-build homes to 90%. This compares with a rate of 95% on second-hand homes. They have also revised their valuation procedure for new-build homes.

The spokesperson said: “There has been over-supply, and we have to protect ourselves and our borrowers against falls in property value.”