HUNDREDS of mortgage deals have disappeared from the market in the days following the UK Government’s unpopular mini-budget announcement.
Analysis of the market by Moneyfacts.co.uk found on Friday last week - when Kwasi Kwarteng announced tax cuts for the highest earners and a lift on the bankers’ bonuses cap – that 3961 residential mortgage products were available.
By Monday this week the total had fallen to 3880 and, by Tuesday, it had shrunk further to 3596 deals - a reduction of 365 compared to Friday, the analysis for the PA news agency found.
The overall choice of mortgage deals remains significantly higher than it was during the depths of the coronavirus pandemic, which also caused significant economic uncertainty.
In October 2020, when 2259 mortgage deals were available, and first-time buyers were struggling to get on the ladder as low-deposit mortgage deals were particularly at risk of being pulled as lenders were concerned about “riskier” lending.
This time around, the mortgage withdrawals appear to be more evenly spread across different loan-to-value (LTV) brackets.
Rachel Springall, a finance expert at Moneyfacts.co.uk, said: “The upheaval in the mortgage market may cause frustration amongst both borrowers and brokers as they see deals disappear overnight.
“The market remains considerably volatile so it’s vital consumers seek independent advice to assess what their best options are right now.”
David Hollingworth, associate director communications at broker L&C Mortgages, said those who already have a deal agreed with their lender do not need to worry.
He also said that he did not think it would be too long before lenders come back with new deals.
Hollingworth said that while it is not unusual for lenders to withdraw deals, what has happened in recent days has been “incredibly fast-paced”.
He said he expects them to “relaunch once the dust settles”, which could generally be at higher rates than previously.
He added: “The more it [withdrawing deals] happens, the more you reduce the choice for borrowers, but I don’t think it will be too long before you see lenders coming back.”
The Bank of England is expected to hike its base rate by another two percentage points by the end of the year, and rates could top 6% next year according to market expectations.
