A record overnight drop in the choice of mortgage products has been recorded by a financial information website, as the economic fallout from Friday’s mini-budget continues.
Moneyfacts.co.uk said 935 fewer residential mortgage products were on the market on Wednesday compared with Tuesday.
This is the highest fall on Moneyfacts’ records going back to November 2011.
It is also around double the previous record, when the choice fell by 462 on April 1 2020, in the early days of the UK’s coronavirus pandemic lockdowns.
Borrowers would be wise to keep calm
Rachel Springall, Moneyfacts.co.uk
Moneyfacts counted 2,661 mortgage products on the market on Wednesday, down from 3,596 on Tuesday.
Rachel Springall, a finance expert at Moneyfacts.co.uk said: “Borrowers would be wise to keep calm over the current volatility in the mortgage market and seek the advice from an independent broker.
“Various lenders have been very vocal that their decision to withdraw products is a temporary measure, amid the uncertainty over interest rates.
“Borrowers who are currently locked into a fixed rate may be better off coming out of their deal early to refinance before rates climb higher, but this entirely depends on their current situation and the costs to do so.
“Those looking to remortgage may find they have more equity in their home amid rising house prices, but first-time buyers may be struggling to find a property they can afford.”
Twenty7tec, a platform for mortgage advisers, said it saw a record number of daily mortgage searches on Tuesday.
Yesterday, we saw over 100,000 daily mortgage searches for the first time on our platform
Nathan Reilly, Twenty7tec
Nathan Reilly, director of customer relationships at Twenty7tec, said: “In the past week, we have set new records for the total number of daily mortgage searches as an industry.
“Yesterday, we saw over 100,000 daily mortgage searches for the first time on our platform, a 14.3 per cent increase on the previous day.
“The increase in mortgage searches yesterday was particularly driven by the remortgage market.
“Remortgaging accounted for 54.6 per cent of the market yesterday, well ahead of its 45 per cent long-term average.”
He said there was a “significant bottleneck forming in the market”.
Mr Reilly said: “The stamp duty change last week has fuelled further demand just as lenders look at how they price in all the macroeconomic data.
“That said, it’s likely just a short-term pinch point that the market will price as and when things settle down over coming days. The simple fact is that there’s plenty of cash still available to lend.”
Lending giants have been hiking mortgage rates and withdrawing products amid the market turmoil prompted by Friday’s mini-budget.
Among the most recent announcements, Yorkshire Building Society said on Tuesday that it was temporarily withdrawing its range of mortgages for new customers.
Santander has temporarily removed 60 per cent and 85 per cent loan-to-value mortgage products for new customers as well as increasing some mortgage rates.
HSBC UK said on Tuesday that it had removed its “new business” residential and buy-to-let products from sale but broker products would be available again on Wednesday.