By David Lawrenson

This week there has been further tightening in the credit criteria that mortgage companies apply on new build flats.

Alliance & Leicester is reducing its loan to value on new build flats to 70% after growing increasingly worried about falling prices of flats in many Midland and North of England cities - with Nottingham, Leeds, Liverpool and Manchester seeing the biggest price falls.

Their move follows similar moves by other lenders including Nationwide, Platform and West Bromwich.

Part of their concern goes back to the fact that many people who have bought flats here have done so with fairly chunky borrowings equivalent in many cases to the values of the flats themselves.