As a result of mini-budget market volatility, which has stoked fears of additional interest rate hikes, mortgage lenders in the United Kingdom are looking for an escape. Virgin Money and Skipton Building Society have temporarily withdrawn their complete product lines, and Halifax will no longer offer fee-based mortgages.
The market volatility prompted by Friday’s tremor-inducing mini-budget has resulted in the withdrawal of both partial and complete mortgage lending ranges.
Virgin Money and Skipton Building Society have temporarily pulled their full range of mortgage products, while Halifax, the largest mortgage lender in the nation, has announced it will eliminate fee-paying mortgages.
Charge-paying mortgages permit borrowers to pay a fee for a reduced interest rate.
The adjustments at Halifax will take effect on Wednesday, whilst the choices at Virgin Money and Skipton Building Society have already taken effect.
It is believed that several other, smaller lenders have also suspended the sale of fixed deals.
As a result of Chancellor Kwasi Kwarteng’s announcement of the most substantial tax cut program in 50 years and the ensuing market turmoil, traders anticipate that the Bank of England will hike interest rates to 6% – even higher than it indicated last Thursday.
On Monday, the Bank fueled these apprehensions by announcing in an unexpected statement that it “would not hesitate to adjust interest rates as appropriate.”
A dealer told Reuters that the withdrawal was precipitated by the uncertainties around future rate hikes.
Jamie Lennox, director of Dimora Mortgages, stated that “uncertainty surrounding the prospect of an emergency rate increase is likely to result in other lenders pulling products or drastically boosting rates until they know the extent of how this all plays out.”
Halifax is modifying its mortgage product offerings “due to major changes in the cost of finance,” according to parent firm Lloyds.
Virgin Money took its decision “given market conditions,” a spokeswoman for the company said in a statement, adding that applications already submitted will be processed as usual.
The company stated that it intends to release new items by the end of the week.
