Home > News > Two UK lenders pull new mortgage deals amid volatile market

Two UK lenders pull new mortgage deals amid volatile market

UK lenders Virgin Money and Skipton Building Society temporarily withdrew mortgage deals for new customers on Monday, reacting to financial market volatility prompted by the government’s mini-budget.

Lenders were struggling to accurately price their products after the pound fell to new lows and sent the interest rate on government debts to a 12-year high, in what brokers predicted was just the start of a major shift in the UK mortgage market.

Virgin Money alerted brokers that it would temporarily withdraw its mortgage products for new customers by 8 pm on Monday. Similar notifications were sent by Skipton Building Society, which said it would pull its own products immediately.

“Following last week’s [Bank of England base rate hike to 2.25%] and the government’s subsequent mini-budget, we continue to see the market response unfold,” Skipton said in an email to brokers. “In response, we will be temporarily withdrawing our new business product range with immediate effect.”

“We haven’t taken this decision lightly but have done so in order to avoid further disruption for you and your clients,” Skipton added.

A spokesperson for the building society said it was hoping to reprice its mortgages and assured that “a new range will shortly be on sale”. “Customers with applications in progress are not affected by this, and our existing customer range still remains available,” they added.

Earlier on Monday, Halifax, the UK’s largest mortgage lender, said it had withdrawn its mortgage products offering arrangement fees in return for lower interest rates and was moving to a full fee-free range.

It was the latest fallout from the government’s mini-budget on Friday, with investors concerned over the long-term impact of sweeping tax cuts and a huge rise in government borrowing.

Nicholas Mendes, of the mortgage broker John Charcol, said that the markets were so unpredictable that lenders were unable to price their products, a process which usually only involves forecasting economic conditions, including interest rates, two weeks in advance.

It was causing a chain reaction in the market where no lender wanted to be the last one standing with mortgages on offer for fear of being swamped with applications. Mendes said it was “uncharted territory” for borrowers.

HICH LTD has continually raised the quality standards in the UK property survey market. Our multi-award-winning property survey service has made us the leading reference in the property survey market.

We offer property survey services of the highest quality. Using state-of-the-art equipment, we provide top-notch property surveys at affordable prices. Our prices are based on the number of rooms rather than the value of the properties, so you will always get the best value for money with our services.

Please look at our Trustpilot page and see why customers have chosen us as their favourite property survey provider!

At HICH LTD, we work to serve our clients and make the world a better place for everyone. We actively collaborate with NGOs to promote environmental, social and charitable causes. If you want to know more about our efforts or how you can help, contact us at hichinfo@aol.co.uk.

HICH LTD extends a warm invitation to contractors and service providers throughout the UK to join our network; by joining the Contractors and Service Providers Network, you will enjoy benefits such as a significant increase in customer flow, advertising on our high-traffic website, and direct contact with thousands of customers in your zip area. Find more information here or by following the QR code in the following video.