More than 900 mortgage products were pulled by lenders last night as volatile markets continue to react to the government’s mini-Budget, according to Moneyfacts.
The data group says a record 935 home loans were withdrawn on Tuesday, more than double the previous highest fall of 462 products on 1 April 2020 at the start of the pandemic lockdowns.
In the days following Chancellor Kwasi Kwarteng’s tax-cutting statement on Friday, a range of large and small lenders have pulled all or part of their residential and buy-to-let loans.
Halifax Intermediaries said by the end of Tuesday all products in its homebuyer range that charge a fee – including shared equity and green products – will be removed.
Kensington removed the majority of its residential and BTL options and Keystone pulled all of its product offerings as a temporary measure.
BM Solutions withdrew its BTL and let-to-buy mortgages that charge a fee, Clydesdale Bank took a selection of new business deals off the market, West One has pulled its entire fixed-rate BTL catalogue, and The Nottingham for Intermediaries is repricing a number of its offerings.
Your Mortgage Decisions director Dominik Lipnicki says: “The recent uncertainty and the behaviour of some lenders really does remind me of the 2008/2009 economic crash and the associated stress for borrowers that the situation caused.”
The pause in new lending comes after the price of UK bonds rose sharply on international money markets after the Chancellor cut income taxes, national insurance payments and stamp duty last week. Rising bond rises have had a knock-on effect on the rates lenders can borrow at.
Shaw Financial Services founder Lewis Shaw says: “The rate cards we’re seeing will bring a tear to many an eye. Rates that were sub-1% a year ago are now hovering around 5.5%. We’ve even breached 6% with some 95% loan-to-value deals, which will inevitably hit first-time buyers the hardest.”
Many economists forecast the Bank of England base rate will hit 5.9% by September next year, compared with 0.1% last December.
