One of the biggest mortgage lenders has decided to reduce the amount of money it is prepared to lend to home buyers.

KBC Homeloans, formerly IIB Homeloans, will offer mortgages of only 80% as a proportion of the value of a home.

The company said it has taken the decision due to the uncertain economic climate.

Today's development marks a significant change in policy for mortgage lenders who previously offered 100% loans, which were recently reduced to 90% loans.