Lenders are pulling the plug on new mortgage lending amid the coronavirus crisis as they look to support existing customers and protect their businesses.
Both Together Financial and Vida Homeloans have temporarily stopped accepting any new loan applications, citing uncertainty due to the Covid-19 pandemic as the reason for the decision.
Together said it would not accept any new applications across its product range while it focussed its attention on customers “currently in the pipeline”.
A spokesperson added: “At this time, given the general uncertainty, it is difficult to provide any degree of clarity on the potential implications to Together arising from Covid-19 or the government’s and regulator’s current or future responses to tackling the situation.
“We continue to manage the company on a prudent basis and to monitor the situation carefully and will provide further updates as and when appropriate.”
The halt on new mortgage lending applies only to new customers approaching the lender. All applications already being processed by Together will be honoured.
A spokesperson from Vida said it had been advised by its valuers that it was unable to conduct physical valuations of any properties, meaning any valuation due to be carried out on a current mortgage application would now not take place until further notice.
They added: “This also means that we are unable to accept any new mortgage applications for the time being. Any pre-valuation cases will now be withdrawn.”
The news comes despite the Financial Conduct Authority, Bank of England and HM Treasury writing to banks across the UK urging them to extend lending despite uncertain economic conditions.
The three bodies wrote to banks and building societies today (March 25), explaining the priority for banks and building societies should be to pass on any benefits from government measures to businesses and consumers.
West Bromwich Building Society has also pulled its entire mortgage product range and is set to launch a limited offering later today.
A spokesperson said: “This way we can continue to service the market, as well as prioritise those that are experiencing financial difficulty.
“We believe this is a responsible approach and we’re committed to continuing to service our customers.”
The industry has already seen lenders pull products from the market, primarily tracker mortgages following the Bank of England’s base rate cuts.
FTAdviser understands lenders across the board are struggling to write business while markets remain uncertain.
The coronavirus crisis is expected to see property prices tumble, which can significantly alter the amount lenders are willing to lend, while the pandemic has also put jobs and incomes at risk, meaning affordability is hard to judge.
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