Record drop in choice of mortgage products as the economic fallout from Friday’s budget continues
28 September 2022, 14:36 | Updated: 28 September 2022, 15:58
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 budget continues.
Moneyfacts.co.uk said 935 fewer residential mortgage products were on the market today compared with Yesterday.
Yesterday, the company recorded 3,596 products compared to today when there were 2,661.
This is the highest fall since records began in November 2011.
It is also double the previous record, when the choice fell by 462 on April 1, 2020 as the UK went into lockdown.
Interest rates are expected to rise sharply following the government's tax-cutting mini-budget on Friday.
Economists are predicting that could lead to a 10-15% drop in house prices.
But for people with variable rate mortgages, this could mean paying hundreds of pounds extra a month.
Professor of Economics Danny Blanchflower calls the Chancellor 'utterly incompetent'
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Today the pound continued to fall despite the Bank of England's intervention to buy Government debt and stop borrowing costs spiralling out of control.
The Bank of England has launched an emergency UK Government bond-buying programme to stave off a "material risk to UK financial stability".
It said it will buy Government bonds - known as gilts - at an "urgent pace" after fears over the Government's economic policies sent the pound tumbling and sparked a sell-off in the gilts market.
While the pound hit an all-time record low of 1.03 against the US dollar on Monday, the yield on 10-year gilts - which is a proxy for the effective interest rate on public borrowing - has soared by the most in a five-year period since 1976, according to experts.
Today, the Sterling fell 1.5% against the dollar to $1.05 amid volatile trading, and while the Bank's intervention did calm gilt traders it did not stabilise the pound.
Opposition parties demanded that Parliament be recalled.
Twenty7tec, a platform for mortgage advisers, said it also saw a record number of daily mortgage searches on Tuesday.
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% and 85% loan-to-value mortgage products for new customers as well as increasing some mortgage rates.
Yesterday HSBC said it had removed its ‘new business’ residental and buy-to-let from sale but broker products would be available again on Wednesday.
