Banks and building societies are withdrawing some of their mortgages from sale after the Government’s mini-budget triggered massive market turmoil.
North based Virgin Money, Halifax and Skipton are among lenders which have so far taken some of their products off the market, in anticipation of a further interest rate rise from the Bank of England. Scottish Building Society, Paragon, Leek United Building Society and The Nottingham for Intermediaries have also pulled deals.
The move follows action already taken by Newcastle-based Virgin Money, which announced changes to its mortgage variable revert rates, following the 0.5 per cent rise in the base rate by the Bank of England in August, affecting mortgages for Virgin Money Group, which includes Clydesdale and Yorkshire Bank.
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It said: “Given market conditions we have temporarily withdrawn Virgin Money mortgage products for new business customers. Existing applications already submitted will be processed as normal and we’ll continue to offer our product transfer range for existing customers. We expect to launch a new product range later this week.”
Halifax also said it is withdrawing all mortgages that come with a fee, saying: “As a result of significant changes in mortgage market pricing we’ve seen over recent weeks, we’re making some changes to our product range. There is no change to product rates, and we continue to offer fee-free options for borrowers at all product terms and LTV levels, but we’ve temporarily removed products that come with a fee.”
The Skipton Building Society said it had also withdrawn its offers for new customers, in order to “reprice” given the market movement in recent days.
A spokeswoman said: “We have temporarily withdrawn our mortgage range to new customers. This is so we can reprice following the market response over recent days. A new range will shortly be back on sale. Customers with applications in progress are not affected by this and our existing customer range still remains available.”
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The decisions were taken after markets started predicting massive rises in interest rates this and next year.
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 per cent next year according to market expectations.
A total drubbing of the pound yesterday even raised the prospect of an emergency rate hike from the bank. However in the end Governor Andrew Bailey merely released a short statement, saying the bank would change interest rates “by as much as needed” to get inflation back to its 2 per cent target.
Consumer Prices Index inflation is currently hovering at around 10 per cent, and is expected to peak higher later this year.
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