Gatehouse Bank has become the latest UK lender to temporarily withdraw its mortgage products, citing an “unprecedented level of demand” for its services.
So far, at least five other lenders have had to step back from the market for periods of time in recent months in order to process “intense backlogs” as service levels are stretched further by a rapidly changing interest rate environment.
In an email to brokers sent this morning (August 16), Gatehouse said: “Over the past few weeks, we have seen an unprecedented level of demand for our Home Finance products.
“In light of this, we have taken the decision to temporarily withdraw all buy-to-let and home purchase plan finance products from sale at 5.00pm today.”
The lender added that while it understood the move will cause some inconvenience for brokers and their customers, it believes these changes are “the right thing to do” in order to manage the service levels.
Gatehouse did say, however, that any valid decisions in principle can be submitted with a client signature by 11.59pm on August 25.
The lender’s home purchase plan is a Shariah-compliant alternative to a mainstream mortgage. Its buy-to-let products are also Shariah-compliant.
Both ranges are geared towards UK expats and international residents as well as UK residents.
“What you can take from this is that they’re all saying the same thing - lenders are receiving too many applications,” said Trinity Financial director, Aaron Strutt.
“It’s not that they haven’t got any business, and that’s a positive we can take from it. Any withdrawal is, however, frustrating for a borrower - especially one in the process of an application.”
This month, Suffolk Building Society, Coventry Building Society and Saffron Building Society all temporarily stopped accepting new mortgage business due to pressure on service levels.
In July, The Cambridge Building Society did the same, and in June so did specialist lender Hodge for Intermediaries.
Last week, brokers predicted more lenders would have to temporarily withdraw from the market in order to catch up with their own service levels.
Mortgage sales head at London Mortgage Partners David Gissing said at the time: “I wouldn’t be surprised if others follow suit, some lender SLAs [service level agreements] at the moment are at four weeks to just carry out an initial review of documents and send a checklist of what’s required to underwrite.
“Only a handful of lenders are maintaining good SLAs at the moment.”