Aldermore, The Mortgage Lender and Foundation Home Loans are amongst a number of lenders who have been forced to pull products in the face of ongoing swap rate volatility.
Yesterday saw a wave of lenders withdraw products as the funding market adjusts to the high probability that interest rates will be increased again by the Bank of England (BoE).
All lenders who have withdrawn products are due to return with newly priced products in the coming days.
The changed expectation on interest rates follows the release of data from the Office for National Statistics which showed that inflation had fallen to 8.7% – economists had anticipated a lower figure of 8.2%.
That coupled with a 30-year high in core inflation figures saw interest rate expectations soar to 5.5%.
Amit Patel, adviser at Trinity Finance, said the market had hallmarks of the post mini-Budget period in 2022.
He said: “This is Truss and Kwarteng all over again. Lenders have had to react due to market conditions and protect their position as responsible lenders.
“This creates a headache for brokers as we have to react quickly to secure a rate before the plug is pulled.
“This can be tricky if you are still awaiting the client to send you documents to support an application.”
While Rob Gill, managing director at Altura Mortgage Finance, warned that brokers were on the lookout for withdrawals becoming more widespread.
“We appear to be entering a credit crunch affecting smaller, specialist lenders with several withdrawing products citing volatility to credit markets after Tuesday’s inflation figures,” said Gill. “For the time being at least the impact is restricted to a handful of smaller lenders, although brokers and borrowers alike are keeping a close eye on the wider market for signs of contagion.”
Lewis Shaw, owner and mortgage broker at Riverside Mortgages, added: “Here we go once again. This will put the fear of god into mortgage holders.
“Everyone thought we’d be sub-4% by now. Without intervention, this is shaping up to be a very rocky year.
“Let’s hope the people at the Bank of England have something up their sleeve because if they haven’t it could get very nasty very quickly.”
Michael Webb, managing director at Mortgage Republic, concluded: “This response from Aldermore, combined with that of other niche lenders, is not surprising. We tend to have a domino effect when rates start to be withdrawn.
“A couple of reasons for this. They are all affected by the same outside financial forces, and they all do not want to get left exposed as significantly cheaper than the market, offering deals they subsequently find they cannot fund.
“I fully expect some normality to return to the buy-to-let markets after the bank holiday weekend.”
