The Nationwide Building Society is the latest lender to tighten up on interest-only lending.

It has decided to cap its interest-only lending at 50% LTV (from 75%).

It cut the maximin LTV for interest-only borrowers from 85% to 75% in April 2011.

Adrian Knott, director of independent mortgage broker, Adrian Knott Partnership, said: “The Nationwide’s decision is another hammer blow to borrowers and the broader property market.