Lenders changing mortgage deals: what this means for you

PUBLISHED: 30th Sep 2022

With the pound falling to its lowest level on Monday since 1985 (although it did start to recover by the afternoon) and a forecast of higher interest rates, several mortgage lenders have temporarily stopped offers for new clients.

Why are banks pulling mortgages now and what does this mean for you as a home buyer and homeowner?

We asked the Mortgage Advice Bureau for an overview on the current situation, here is their assessment:-

On Tuesday 27th September, there were around 3,596 residential mortgage deals available, which is a stark comparison to last years 5,315*. The amount of available deals dropped by around 284 overnight which may have sparked concerns over availability.

Following the mini-budget announcement by Kwasi Kwarteng many lenders are struggling to price their products accurately,  which is why many have temporarily suspended them. As a result of the mini budget, and expected further tax cuts, sterling on the market is seeing volatility. This also comes in line with current interest rate rises and an expected interest rate rise of 6% next year.

With all these movements in the financial sector, it is no wonder we are seeing financial institutions exercising caution.

Which banks have pulled mortgage deals?

Skipton Building society and Virgin money have both temporarily paused any mortgage offers for new clients. Halifax, which is owned by Lloyds Banking Group has said they’re going to halt any current mortgage products where the fees associated typically have lower interest rates.

Other bank and lender changes include**

  • HSBC is removing residential and buy-to-let mortgage sales to new clients
  • Post Office is temporarily withdrawing residential and buy-to-let mortgages
  • Santander has removed all 60% and 85% LTV (loan to value) to new customers
  • Santander has also raised lending rates on mortgage transfers
  • Yorkshire Building Society has withdrawn deals for new customers
  • Nationwide has increased rates on its 2, 3, 5 and 10 year fixed rate mortgages
  • Bank of Ireland has withdrawn all residential and buy to let rates
  • Atom Bank has temporarily withdrawn its entire mortgage range

While this list isn’t exhaustive, it indicates the level of change we’re seeing in the home buying circuit. It may seem concerning, but many of these institutions have stated that they will put their offers back up once they have re-evaluated their financial positions.

All have also stated that they would continue to support their existing customers, even if you have just placed an application.

We’ve seen pulled mortgage deals before

While all of this is certainly stressful especially with the current cost of living crisis and the general increase in consumer goods, it is not the first time that this has happened. In fact, the housing market saw something very similar in the pandemic, with many lenders re-evaluating their products, portfolios and fees.

During the nationwide lockdown, mortgage approvals as a whole fell, lenders tightened their lending criteria and some lenders pulled their deals from the market entirely, which reduced the number of options for anyone shopping around.

Despite this, June saw an astronomical surge in house sales with just under 147, 827 reported sales*** coming through. This indicates that while things may seem choppy, there’s no need to panic. We need to wait and see what unfolds in the coming weeks and if in the meantime people have questions or concerns, Mortgage Advice Bureau are advising to give them a call.

Why you need expert mortgage advice now more than ever

While a variety of factors, including rates, house prices, and supply and demand can affect property prices we have always been able to come back from this in the past.

At the moment, mortgage deals are slightly limited in terms of choice, but there are still plenty of deals available. If you are considering re-mortgaging early to get ahead of the increases, speak to your Mortgage Adviser - not only do they have their finger on the pulse of the housing market, they know who you can work with and what lenders will offer you a mortgage.

If you are considering buying a house and are concerned about the current changes, call Mortgage Advice Bureau Bingley on 01274568832

If you require further information on the housing market, David Phillip FRICS has over 30 years’ experience selling properties in North and West Yorkshire and would be happy to answer any of your questions.

David Phillip Estate Agents, 86, Leeds Road, Bramhope, Leeds, LS16 9AN. www.davidphillip.co.uk

Covering Bramhope. Pool-in-Wharfedale, Cookridge, Adel and Otley

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If you are considering selling your home, choosing the right Estate Agent is key.
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