One day sees 11% of mortgage deals scrapped

30 September 2008

Global financial crisis hits homeowners and landlords

Since the beginning of this week nearly 500 mortgage products have been withdrawn, dealing another unwelcome blow to homeowners and landlords across the nation.

Moneyfacts, one of the main financial information providers, said the number of mortgages for residential customers and landlords for buy-to-let has decreased from 3,914 on Monday morning to 3,469 today, Tuesday morning.

This equates to an 11% drop in the number of mortgages on the market and follows a sharp increase in Libor rates as a result of the global banking crisis.

Over the past year the number of mortgages on the market has been decreasing. During this period, most lenders have scaled down their product ranges and some have even withdrawn themselves from the market for new borrowers altogether.

According to Moneyfacts, 85% of buy-to-let mortgages have been withdrawn in the past year, while the number of mortgage products in the residential market has decreased by 60%.

Michelle Slade, an analyst at Moneyfacts, said: “If more lenders decide to take the same stance and withdraw their range on a temporary basis, it is likely to cause a bottleneck for the remaining lenders.

“As the pressure on these lenders increases, service is likely to suffer. As a result we may see further lenders being forces temporarily to withdraw their range,” she added.

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