Some of the UK’s largest mortgage lenders have begun to withdraw a variety of mortgage products in response to the market volatility triggered by the government’s mini-Budget.
Household names like HSBC, Virgin Money, Halifax and Skipton Building Society, pulled some or all of their products on Monday and more lenders are following suit with banks like Santander announcing their decision to temporarily remove all 60% and 85% LTV products from their new business range whilst also increasing rates across the vast majority of their products.
The number of residential mortgages on offer by lenders fell to 3,596 on Tuesday, according to financial information firm Moneyfacts, compared with 3,961 deals on Friday when the mini-budget was announced. It is also a sharp fall from the number available in December last year when the Bank of England started raising interest rates.
Why are lenders pulling mortgage deals?
The mini-budget was not received positively by the markets which saw the pound plummet against the dollar. The Bank of England reacted on Monday afternoon stating that it would “not hesitate” to hike interest rates in order to curb inflation.
This uncertainty has meant that lenders are pausing, withdrawing and frantically reprising products whilst they wait to see what the Bank of England will do next with Interest rates.
Financial markets are constantly updating their predictions with some experts predicting that interest rates could now more than double by next April to 5.8%, from their current level of 2.25%, to curb inflation.
Will my mortgage offer be withdrawn?
If you have a mortgage application that has been agreed in principle. and the application has been fully submitted, in most cases, the lender will honour the original product, even if the survey has not taken place as yet.
Key things to note:
- Product transfer deals are still available for existing clients although we expect to see rate increases.
- Lenders will process existing mortgage applications as normal.
If you would like to discuss your current mortgage or have a large portfolio that you’d like us to review, speak to a member of the team or our senior broker, Danny O’Keeffe on 0208 364 3444 alternatively schedule a call back by clicking on the button below.
UK Property Market Remains Surprisingly Resilient
House sellers have continued to raise their asking prices despite borrowers facing higher interest rates and the cost of living squeeze, data from property portal Rightmove shows.
The average price of a home coming to market increased by £2,587, or 0.7% month-on-month in September to £367,760, according to the company. Tim Bannister, Rightmove’s housing expert, said the UK market remains “surprisingly resilient” despite growing economic pressures.
UK Chancellor Announces Extensive Stamp Duty Tax Cuts
Stamp Duty cuts will help people on all levels of the property market and lift 200,000 homebuyers every year out of paying the tax altogether.
The nil rate band will be doubled from £125,000 to £250,000, meaning that 200,000 more people every year will be able to buy a home without paying any Stamp Duty at all.
The Government is going even further to support first-time buyers, who will now pay no stamp duty up to £425,000, and increasing the value of the property on which first-time buyers can claim relief, from £500,000 to £625,000. This tax cut took effect from midnight Friday 23 Sept 2022.