Nearly 800 mortgage deals pulled from UK market
More than 400 buy to let mortgages and 300 residential mortgages were pulled by UK lenders at the start of last week. This is less than ideal news for anyone who had been planning to buy or remortgage this year, with nearly 10% of mortgage options now unavailable.
Interest rates have been steadily climbing and this combined with high inflation and house price instability has led many lenders to reconsider their offerings. Though there are less mortgages available now, there are still almost double the number on the market compared to the 2,258 on offer in October 2022.
In this section:
- Why are UK banks pulling mortgage deals?
- Which lenders have pulled mortgage deals?
- Will more mortgage deals be pulled?
- What should I do if I was planning to buy this year?
Why are UK banks pulling mortgage deals?
With house prices dropping and interest rates rising, this has caused significant instability in the UK mortgage market. With 13 consecutive interest rate rises and another likely to happen this month, lenders have decided to reassess the mortgages they are offering. Now, nearly 800 residential and buy to let mortgages have been pulled from the market.
Many lenders have pulled selected 2, 5 and 10 year fixed rate deals and several have removed themselves entirely from the market, until UK rates drop.
The main cause of rising interest is inflation. Inflation in the UK is currently 8.7%, which while an improvement on the previous rate of 10.1%, is still much higher than anticipated. Inflation did decrease in April but at a much slower rate than expected.
Increasing rates are likely to lead to payment difficulties, with rates being particularly since last years Autumn mini budget. Average rates for mortgages started to fall recently. These rates have begun increasing again as inflation failed to fall as much as expected in April.
With the government aiming for 5% inflation by the end of 2023, the main way to achieve this is through continued interest rate rises. It was previously predicted the Bank of England (BoE) base rate would peak at a high of 5.5% before decreasing. This figure is now believed to be closer to 6%, hitting this rate at the end of 2023/start of 2024.
It is looking inevitable that UK will fall into recession if no major improvements to inflation are made.
Which lenders have pulled mortgage deals?
Here, we have a full list of lenders that have pulled mortgages and which mortgages are affected.
Buy to let mortgages – 405 mortgages pulled overall
Aldermore – All fixed rate mortgages pulled
Bank of Ireland – All fixed rate mortgages pulled
CHL Mortgages – All fixed rate mortgages pulled
Fleet Mortgages – All fixed rate mortgages pulled
Foundation Home Loans – All fixed rate mortgages pulled
Kensington – Selected fixed rate mortgages pulled
Kent Reliance – Selected fixed rate mortgages pulled
Marsden Building Society – Selected fixed rate mortgages pulled
Precise Mortgages – Selected fixed rate mortgages pulled
The Mortgage Lender – All fixed rate mortgages pulled
Residential mortgages – 373 mortgages pulled overall
Aldermore – All fixed rate mortgages pulled
Bank of Ireland – Selected fixed rate mortgages pulled
Bath Building Society – Selected fixed rate mortgages pulled
Furness Building Society – Selected fixed rate mortgages pulled
Foundation Home Loans – All fixed rate mortgages pulled
Halifax – Selected fixed rate mortgages pulled
Hinckley & Rugby Building Society – Selected fixed rate mortgages pulled
Kensington – Selected fixed rate mortgages pulled
LendInvest – Selected fixed rate mortgages pulled
Marsden Building Society – Selected fixed rate mortgages pulled
MPowered Mortgages – Selected fixed rate mortgages pulled
Newcastle Building Society – Selected fixed rate mortgages pulled
Principality Building Society – Selected fixed rate mortgages pulled
Scottish Building Society – Selected fixed rate mortgages pulled
Tipton & Coseley Building Society – All fixed rate mortgages pulled
Vernon Building Society – Selected fixed rate mortgages pulled
Will more mortgage deals be pulled?
It is possible that lenders will remove more mortgages from the market if inflation remains high, as this will continue driving up interest rates. Higher rates can make mortgages less affordable per month, and lenders will be warier to offer mortgages if the likelihood of defaulting on payments is higher.
If your affordability is good, you should still be able to find a lender willing to provide you with a mortgage but your options could be more limited now. Anyone with a lower credit score or more complex income may find it useful to get further advice before applying. Our mortgage specialists can search the market on your behalf to find the best rates and deals available.
What should I do if I was planning to buy this year?
If you were looking to buy a home or remortgage this year, there are still a wide range of options available to you. Although it may be discouraging to see such instability in the market, it can still be possible to find a great mortgage with the right advice.
Our skilled mortgage team have more than 20 years of expertise and knowledge to help you find the right mortgage and rates, no matter your situation. As specialist brokers we can help with both traditional and more complex mortgages including:
Call 0330 118 8188 today to speak to one of our expert brokers or CLICK HERE to submit an enquiry online.
Useful resources
Finder – UK mortgage statistics
Money Facts Group – Mortgage choice falls as deals are pulled from sale
