In a sudden shift, the number of mortgage deals available in both the residential and buy-to-let sectors has dropped as lenders withdraw products from the market.
This development, as revealed by Moneyfactscompare.co.uk, affects product choice and impacts the average mortgage rates.
Over the past few days, numerous providers, including Bank of Ireland UK, Halifax, and Aldermore among others, have pulled selected fixed mortgage products from the residential sector.
Some, like Aldermore and Tipton & Coseley Building Society, have withdrawn their entire fixed-rate range.
Consequently, the total number of available mortgages has decreased from 5,385 to 5,012 in just a week.
Average rates on 2- and 5-year fixed mortgages have also increased to 5.38% and 5.05% respectively since the start of May 2023.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, explained the market dynamics: “This volatility is down to concerns surrounding future interest rate hikes, and lenders are reassessing their propositions. Consumers looking to refinance will find rates around 5% on average for a fixed deal, compared to around 3% a year ago.”
The buy-to-let market is experiencing similar changes. Lenders like Precise Mortgages, Kensington, and Marsden Building Society have pulled selected fixed mortgage products recently, and the total number of buy-to-let mortgages has fallen from 2,748 to 2,343 in a week. Average rates on 2- and 5-year fixed buy-to-let mortgages have risen to 5.61% and 5.52% respectively since the beginning of May 2023.
Springall further highlighted: “Landlords will be disappointed to see a drop in product choice and that average fixed rates are on the rise. Buy-to-let product choice dropped below 1,000 deals in October last year, so it will be a concerning echo of that period if choice plummets to such a low again.”
