Mortgage product choice continued to contract over the weekend, with 200 fewer residential mortgage products available on the market on Monday (June 5) than on Friday.
According to Moneyfacts, yesterday (June 5) there were 4,686 residential mortgage products available on the market, down from the 4,888 available Friday last week.
This week, the uncertainty has continued as more lenders pull products from the market.
Brokers were informed this morning by email that TSB is increasing its rates by as much as 0.75 percentage points from tomorrow.
Likewise, specialist lender Precise contacted intermediaries today to let them know that it was withdrawing its exiting range of buy-to-let products and that a new range would be available from tomorrow. Brokers have until 5pm this evening to secure existing rates.
The drop in product count this week follows on from the contraction seen last week, when over 800 products were pulled after April’s worse than expected inflation figure spooked lenders and led to them withdrawing deals in order to reprice them upwards.
Average mortgage rates have jumped significantly in the last month, with an average two-year fixed rate product across all loan-to-values up by nearly 0.50 percentage points since the beginning of May.
Date | 2 Year Fixed, All LTVs | 5 Year Fixed, All LTVs |
01/05/2023 | 5.26 | 4.97 |
30/05/2023 | 5.38 | 5.05 |
05/06/2023 | 5.72 | 5.41 |
Source: Moneyfacts
The withdrawals began just under two weeks ago with some smaller and specialist lenders.
By the following week, other larger lenders had followed suit prompting brokers to renew their calls for mandatory notice periods on rate changes in order to better support them in meeting client demand.
On Friday (June 2), brokers were again vexed after a further tranche of lenders contacted them about rate changes and product withdrawals with most giving very little notice of the changes.
This included Santander, who announced that rates would be increasing by as much as 0.43 percentage points.
TSB also contacted mortgage intermediaries to let them know that it was “making urgent withdrawals” to its 10-year fixed range amidst the uncertainty. In this case, brokers were given two and a half hours notice.
Coventry Building Society also notified brokers on Friday that it was removing a number of products from the market to reprice them, however, in line with Coventry’s ongoing commitment to brokers on notice periods, it gave intermediaries two days' notice of the changes.
Commenting on the rate changes at the time, John Charcol’s mortgage technical manager, Nicholas Mendes said while rates are expected to fall again, the short-term volatility will “no doubt put pressure on households’ decision making and circumstances”.
Elsewhere, research released yesterday from Hargreaves Lansdown suggested that almost half of borrowers (48 per cent) would struggle financially if their monthly mortgage repayments increased by as little as £150.
An estimate from the Resolution Foundation has forecast that anyone who is coming to the end of their fixed-deal this year will see their monthly payments go up by £192.
According to data from UK Finance, 800,000 borrowers are scheduled to come off their fixed rates in the second half of this year.
Residential mortgages outstanding, December 2022
| Number |
| % of total |
Fixed | 6,881,000 |
| 81% |
Tracker | 639,000 |
| 8% |
SVR | 773,000 |
| 9% |
Total | 8,501,000 |
| 100% |
Hargreaves Lansdown head of personal finance, Sarah Coles, described the situation as "a remortgage nightmare lying in wait".
jane.matthews@ft.com
