As concerns mount over potential increases in interest rates by the Bank of England, lenders have begun to withdraw additional mortgage deals, causing offers to plunge to a three-month low.
Monday saw a notable drop in the number of available mortgage packages – 200 fewer than the preceding Friday. This is reportedly the lowest tally since mid-March, according to Sky News. Over the course of the weekend, the total mortgage products dropped by 4%, sliding from 4,686 to 4,616. This shift underscores a jittery market riddled with uncertainty over whether the Bank of England will indeed hike interest rates again later in June.
A few prominent lenders, including Santander and Furness Building Society, have withdrawn a number of their fixed-rate offers. Additionally, the Co-operative Bank took a dramatic step by removing its entire range of mortgage products from the market.
Meanwhile, Halifax, the country’s largest mortgage lender, hiked some of its fixed-rate offers by 0.3%. Leeds Building Society followed suit with an increase of 0.4% on its offers.
This tightening of the mortgage market coincides with a trend among first-time buyers who increasingly opt for longer mortgage terms of 35 years or more. UK Finance, a banking trade group, revealed record-breaking data of buyers choosing 35-year mortgages to ensure lower repayment amounts.
In fact, the proportion of first-time buyers (FTBs) opting for longer-term mortgages surged to 19% in March, a figure that more than doubles last year’s rate.
Two and five-year fixed-rate deals are also on the rise. Data from financial firm Moneyfacts highlighted that the average two-year rate has reached 5.72%, while the five-year rate has climbed to 5.41%. Both rates are currently the highest they’ve been since mid-January.
