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Nearly 800 mortgage deals pulled by UK lenders

Lenders have removed almost 10% of available mortgage deals, with buy to let and fixed rate mortgages being hit hardest

A photo of Grace Lynch, the author

By Grace Lynch

Published on: 5 June 2023

4 min read

Nearly 800 mortgage deals pulled by UK lenders

Last week, a range of UK lenders made the decision to pull almost 800 residential and buy to let mortgage deals from the market. This has removed close to 10% of all available mortgage deals, including both residential and buy to let mortgages.

This decision follows growing uncertainty over mortgage rates, with the Bank of England expected to raise interest rates again on 22nd June. This will be worrying news for thousands of homeowners or those looking to buy this year. Rising costs are likely to cause difficulties with mortgage repayments for many UK residents.

Why have almost 800 mortgage deals been pulled?

The main mortgage news of the last week is how lenders have pulled almost 10% of mortgages off the market. Many fixed rate mortgages have been pulled, and some lenders have even chosen to pull their entire range of fixed rate mortgages.

The question you may be asking is why have lenders done this?

The mortgage market has been unstable over the last year with both interest rates and house prices fluctuating significantly. There have been 13 consecutive interest rate rises from the Bank of England, due to higher than average inflation. Inflation fell to single digits in April (8.7%), but this isn’t enough yet to allow interest rates to fall to previously low levels.

The ideal percentage for inflation is 2% for a healthy economy. Though 8.7% is a far more reasonable figure, compared to previous highs of more than 10%, it is still much higher than desired by the government.

How many mortgages have been removed from the market?

So far, it looks like buy to let mortgages are worst affected, as well as fixed rate mortgages. Variable rate mortgages and tracker mortgage products seem to be holding steady for the time being with minimal changes reported.

405 buy to let mortgages have been pulled within the last week by banks and building societies (including repayment and interest only mortgages). The following lenders have pulled their entire range of fixed rate buy to let mortgages:

  • Aldermore
  • Bank of Ireland
  • CHL Mortgages
  • Fleet Mortgages
  • Foundation Home Loans
  • The Mortgage Lender

Other lenders have pulled selected fixed deals for buy to let mortgages including:

  • Kensington
  • Precise Mortgages
  • Kent Reliance
  • Marsden Building Society

Comparatively, only 373 residential mortgages have been pulled at the moment. It is possible that more lenders will decide to follow suit and remove a number of residential mortgages as well. For residential mortgages the following lenders have pulled their entire fixed mortgage rate range:

  • Aldermore
  • Foundation Home Loans
  • Tipton & Coseley Building Society

Lenders that have pulled some (but not all) residential fixed rate deals are:

  • Bank of Ireland
  • Bath Building Society
  • Furness Building Society
  • Halifax
  • Newcastle Building Society
  • Kensington
  • LendInvest
  • Marsden Building Society
  • MPowered Mortgages
  • Hinckley & Rugby Building Society
  • Principality Building Society
  • Scottish Building Society
  • Vernon Building Society

Higher rates and lower house prices look set to cause chaos in the housing market for the foreseeable future. Lenders are reassessing their available offers amid concerns about affordability for customers and likelihood of arrears due to higher rates.

What will happen next with mortgages?

Many economists now fear that UK interest rates will creep higher than the previously predicted 5.5% by early 2024. It is now expected this figure could be closer to 6%, in unwelcome news for current mortgage holders and aspiring buyers.

It is believed that continuous interest rate rises will be the only way to bring inflation back under control. Though inflation is decreasing, it not doing so as quickly as expected. This means prices are still rising for a range of products and services at a rate 8.7% higher than this time last year.

If this instability continues, it is likely that the UK will fall into recession. Chancellor Jeremy Hunt has stated this is something he is ‘comfortable’ with if this leads to a more controllable rate of inflation.

Though the range of mortgages on the market is now more limited, the positive in this situation is there are still far more available than there were last Autumn. Following the chaos caused by the Autumn mini budget, there were only 2,258 deals open to UK borrowers in October 2022.

This number is now just over 5,000, so there is still a lot more choice now compared to last Autumn. Anyone looking for a new mortgage (first time buyers), to move home, or remortgage is in a better position now than they were then.

More mortgage and home news

Here, we have more of the latest news relating to housing and mortgages in 2023.

Resources

Finder – UK mortgage statistics

Money Facts Group – Mortgage choice falls as deals are pulled from sale

Bank of England – Interest rates and bank rate

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