More Mortgage Loan Products Withdrawn
Following the upset and turmoil which hit the banking sector in the UK yesterday, a large number of remaining banks and building societies have withdrawn some, or all of their mortgage and home loan products until things start to settle down in the market place.
Overall, the total number of available mortgage loan products fell by a staggering 11.4 per cent between yesterday and today. At the start of business yesterday, there were 3,914 mortgage loan products available to customers, which is an incredibly low figure anyway, but today this has dropped to a total of 3,469.
Since the beginning of this year, the number of residential mortgage and home loan products has reduced by 60 per cent and the buy to let market has been hit even harder, with a loss of 85 per cent of the loan products which were available at the end of last year.
This has led to concerns that the mortgage and home loan market could dry up altogether until some reasonable level of stability returns to the market. The current liquidity problems faced by banks and building societies, caused by the credit crunch, have also increased fears that this could have a knock on effect in other areas of finance, such as personal loans, credit cards and overdraft interest rates.
If lenders continue to withdraw their products at the present rate, this is likely to add significant levels of pressure to those lenders who are still offering mortgages and home loans with regard to processing issues and service levels and this in turn is likely to cause lenders to be more selective about the customers they are prepared to offer loans to and restrict the already tightened lending criteria yet further, leading to the situation where only those with a perfect credit record and large deposit will be able to obtain any type of mortgage or home loan.
Hopefully, some level of confidence will return to the market from providers in the very near future, once the dust has settled from this week’s shocks.
