Estimated reading time 2 minutes 2 Min

Lenders withdraw mortgages from sale after mini-budget sparked market turmoil

Banks and building societies are withdrawing some of their mortgages from sale after the Government’s mini-budget on Friday sparked massive market turmoil.

September 27, 2022
By August Graham, PA Business Reporter
27 September 2022

Banks and building societies are withdrawing some of their mortgages from sale after the Government’s mini-budget on Friday sparked massive market turmoil.

Three lenders have so far withdrawn some of their products amid the uncertainty, according to reports.

Virgin Money said: “Given market conditions we have temporarily withdrawn Virgin Money mortgage products for new business customers.

“Existing applications already submitted will be processed as normal and we’ll continue to offer our product transfer range for existing customers.

“We expect to launch a new product range later this week.”

Halifax also said it is withdrawing all mortgages that come with a fee.

“As a result of significant changes in mortgage market pricing we’ve seen over recent weeks, we’re making some changes to our product range,” it said.

“There is no change to product rates, and we continue to offer fee-free options for borrowers at all product terms and LTV levels, but we’ve temporarily removed products that come with a fee.”

The Skipton Building Society is doing the same, Reuters and Bloomberg reported.

The decisions were taken after markets started predicting massive rises in interest rates this and next year.

The Bank of England is expected to hike its base rate by another two percentage points by the end of the year, and rates could top 6% next year according to market expectations.

A total drubbing of the pound on Monday even raised the prospect of an emergency rate hike from the Bank. However in the end Governor Andrew Bailey merely released a short statement.

In it he said that the Bank would change interest rates “by as much as needed” to get inflation back to its 2% target.

Consumer Prices Index inflation is currently hovering at around 10%, and is expected to peak higher later this year.

The markets have been in turmoil since Chancellor Kwasi Kwarteng announced his and Prime Minister Liz Truss’s plan for the economy.

The pound briefly dipped to an all-time low against the dollar on Monday morning.

More in Top Stories