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Palestinian platforms: Settlers storm Al-Aqsa Mosque complex under the protection of the occupation police
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Syrian Defense: We call on all parties in Sweida to cooperate with security forces and exercise restraint
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UK mortgage crisis continues as Santander pulls new borrower deals

  • By Al Mayadeen English
  • Source: News Websites
  • 12 Jun 2023 17:46
3 Min Read

The turbulent home credit market has shown no signs of getting better in the UK.

  • x
  •  A branch of Santander bank, in New York on December 17, 2013. (AP)
    A branch of Santander Bank in New York on December 17, 2013 (AP)

As the volatility in the house loan market shows no signs of diminishing, Santander is the latest large bank to say it is temporarily withdrawing its mortgage packages for new consumers off the market.

Santander warned mortgage brokers that it will cease accepting new applications for its "new business" residential and buy-to-let fixed and tracker rates from 7.30 pm on Monday, with agreements not being available again until Wednesday, June 14.

The construction of new homes is being cut back in the UK amid indications that buyers fear a spike in mortgage rates over the next few months. 

According to a construction report, residential building site work plunged to its lowest last month since 2009. However, commercial building and civil engineering sectors, surveyed monthly by S&P and the Chartered Institute of Procurement and Supply (CIPS), demonstrated expansion.

The change affects applications made through mortgage brokers and online, although Santander said new deals for current customers were still available, and those who applied before 7.30 p.m. would not be impacted.

Banks and building societies are continuing to withdraw house loans from their shelves, often with little warning, and boost the interest rates on existing fixed-rate plans. 

TSB, however, will decrease the cost of some of its new packages by up to 0.4 percentage points on Tuesday.

Read next: House prices fall similar to the UK's 2008 crisis

Related News

Mortgage rates in US hit highest in over 20 years: Report

Tory MPs warn mortgage crisis could cost them elections

HSBC said on Thursday it will remove all new business residential and buy-to-let products from 5 pm that day, with sales resuming on Monday.

Only 3 hours later, it announced an immediate removal of products "due to significant demand."

Some mortgage brokers claimed that they had been waiting in queue for more than an hour, unable to contact HSBC, before receiving the amended message.

According to a Santander spokesperson, the bank "continually reviews" its products in light of changing market conditions, adding, "As we prepare for a relaunch of a full range of mortgage products from Wednesday morning, we will not be accepting new applications via intermediary and online channels temporarily from this evening. Our product transfer range remains fully available and customers who have already applied will not be impacted.”

According to the financial data source Moneyfacts, the average rate on a new two-year fixed mortgage has risen to 5.86% on Monday, up from 5.26% at the start of May.

However, the number of residential mortgage offers offered has been increasing in recent days, reaching 4,952 on Monday, up from 4,597 last Wednesday.

Meanwhile, TSB said on Tuesday it will reduce rates on selected two- and five-year loans by up to 0.4 percentage points across its residential and buy-to-let portfolios. This may imply that it has priced its deals more than the market average.

Official interest rates have been raised 12 times in the past 18 months by the Bank of England as inflation continues to soar. 

A report by Resolution Foundation stated that around 1.6 million British households will face a £2,300 increase in mortgage payments after interest rates surged amid a current housing crisis.

  • mortgage rates
  • santander
  • UK
  • United Kingdom
  • mortgage default
  • mortgage

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