Mortgage deals axed following B&B collapse
According to a recent report a huge number of mortgage products from lenders were axed following the high profile collapse of Bradford & Bingley, which was recently part nationalised. Shortly after the collapse over 10% of mortgage that were on offer to borrowers, buy to let investors, and those looking to remortgage were pulled from the shelves. This equates to over one in ten mortgage deals being pulled from the shelves in the wake of the B&B disaster.
With fears over increased turmoil in the financial markets many lenders rushed to try and take their most competitive deals off the shelves. Many mortgage products have already been axed since the onset of the credit crunch, and the increased financial turmoil and uncertainty has made the situation increasingly worse. Even following the recent surprise base rate cut of 0.5% from the Bank of England, a number of lenders have pulled some deals from the shelves such as tracker mortgages.
One industry official stated: ‘The buy-to-let sector has been hardest hit since the turmoil began with 85% of products being withdrawn in a year, but residential mortgages are not far behind with a loss of 60% of products. It appears that lenders are slowly turning the tap off on the number of mortgage products available and their appetite to lend. If the problems continue we have to start asking the question, will the tap will be turned off completely until stable markets return?’
Another official stated: ‘Borrowers are turning to the flexibility of trackers as the mortgage market confusion continues. Rate rises are on their way back after a period when it seemed as if good news was returning to the market. The benefit of trackers is that many have low charges and early redemption fees enabling borrowers to switch relatively painlessly.
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