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You can find the current article at its original source at https://www.theguardian.com/money/2023/jun/12/uk-mortgage-turmoil-continues-as-santander-pulls-deals-for-new-borrowers
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| UK mortgage turmoil: Santander pulls new borrower deals as NatWest hikes rates | UK mortgage turmoil: Santander pulls new borrower deals as NatWest hikes rates |
| (2 months later) | |
| Move follows decision by HSBC and applies to brokers and online applications as lenders hike fixed rates | Move follows decision by HSBC and applies to brokers and online applications as lenders hike fixed rates |
| Santander has become the latest major bank to temporarily pull its mortgage deals for new borrowers from sale, amid a fresh warning that further interest rate hikes may be needed to tackle inflation. | Santander has become the latest major bank to temporarily pull its mortgage deals for new borrowers from sale, amid a fresh warning that further interest rate hikes may be needed to tackle inflation. |
| Days after HSBC temporarily pulled down the shutters, Santander said it would stop accepting new applications for its “new business” residential and buy-to-let fixed and tracker rates at 7.30pm on Monday, with deals not becoming available again until Wednesday 14 June. | Days after HSBC temporarily pulled down the shutters, Santander said it would stop accepting new applications for its “new business” residential and buy-to-let fixed and tracker rates at 7.30pm on Monday, with deals not becoming available again until Wednesday 14 June. |
| It came as NatWest put up the rates on some of its new buy-to-let mortgage deals by as much as 1.57 percentage points overnight. The blow to landlords means a two-year fixed deal priced at 5.22% on Monday will cost 6.79% on Tuesday. One broker suggested the move “could sound the death knell for buy-to-let, at least with NatWest”. | It came as NatWest put up the rates on some of its new buy-to-let mortgage deals by as much as 1.57 percentage points overnight. The blow to landlords means a two-year fixed deal priced at 5.22% on Monday will cost 6.79% on Tuesday. One broker suggested the move “could sound the death knell for buy-to-let, at least with NatWest”. |
| Banks and building societies are continuing to pull home loans, often with very little notice, and raise the cost of their fixed-rate deals. However, in more positive news for borrowers, TSB will on Tuesday reduce the cost of some of its new deals by up to 0.4 percentage points. | Banks and building societies are continuing to pull home loans, often with very little notice, and raise the cost of their fixed-rate deals. However, in more positive news for borrowers, TSB will on Tuesday reduce the cost of some of its new deals by up to 0.4 percentage points. |
| The average rate on a new two-year fixed mortgage has continued to creep up and stood at 5.86% on Monday, according to the financial data provider Moneyfacts, compared with 5.79% last Wednesday, and 5.26% at the start of May. | The average rate on a new two-year fixed mortgage has continued to creep up and stood at 5.86% on Monday, according to the financial data provider Moneyfacts, compared with 5.79% last Wednesday, and 5.26% at the start of May. |
| However, during the last few days the number of residential mortgage deals available have been climbing: on Monday it stood at 4,952 – up from 4,597 last Wednesday. | However, during the last few days the number of residential mortgage deals available have been climbing: on Monday it stood at 4,952 – up from 4,597 last Wednesday. |
| The race to reprice deals upwards follows a smaller-than-expected drop in the latest UK inflation data, which led markets to bet that the Bank of England would raise interest rates above 5% by the end of the year. | The race to reprice deals upwards follows a smaller-than-expected drop in the latest UK inflation data, which led markets to bet that the Bank of England would raise interest rates above 5% by the end of the year. |
| On Monday there was a fresh warning that the Bank may need to increase the base rate further, despite mounting pressure on households from the rising cost of borrowing. | On Monday there was a fresh warning that the Bank may need to increase the base rate further, despite mounting pressure on households from the rising cost of borrowing. |
| Jonathan Haskel, an external member of the rate-setting monetary policy committee (MPC), said the central bank could not rule out more hikes given concerns about stubbornly high rates of inflation. | Jonathan Haskel, an external member of the rate-setting monetary policy committee (MPC), said the central bank could not rule out more hikes given concerns about stubbornly high rates of inflation. |
| The Bank has raised interest rates 12 times in succession since December 2021, from a record low of 0.1% to 4.5%. | The Bank has raised interest rates 12 times in succession since December 2021, from a record low of 0.1% to 4.5%. |
| A Santander spokesperson said that it continually reviewed its products in light of “changing market conditions”, adding: “We will not be accepting new applications … from this evening. Our product transfer range remains fully available, and customers who have already applied will not be impacted.” | A Santander spokesperson said that it continually reviewed its products in light of “changing market conditions”, adding: “We will not be accepting new applications … from this evening. Our product transfer range remains fully available, and customers who have already applied will not be impacted.” |
| NatWest has upped the cost of many of its new deals with effect from Tuesday, and while many of its standard deals will see smaller – though still unwelcome – increases of 0.2 percentage points, some its buy-to-let deals will now be much pricier. | NatWest has upped the cost of many of its new deals with effect from Tuesday, and while many of its standard deals will see smaller – though still unwelcome – increases of 0.2 percentage points, some its buy-to-let deals will now be much pricier. |
| Rate increases of up to 1.57 percentage points shocked some in the mortgage sector. Riz Malik at R3 Mortgages said: “The considerable rise in mortgage rates on buy-to-let properties underlines the flux in the market at present and introduces yet more hardship and pain for numerous landlords. This is a significant blow for the entire UK buy-to-let market.” | Rate increases of up to 1.57 percentage points shocked some in the mortgage sector. Riz Malik at R3 Mortgages said: “The considerable rise in mortgage rates on buy-to-let properties underlines the flux in the market at present and introduces yet more hardship and pain for numerous landlords. This is a significant blow for the entire UK buy-to-let market.” |
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| Lewis Shaw at Riverside Mortgages said: “I’m no longer sure what level of reality I’m meant to be operating on. This could sound the death knell for buy-to-let, at least with NatWest … something has clearly spooked the money markets.” | Lewis Shaw at Riverside Mortgages said: “I’m no longer sure what level of reality I’m meant to be operating on. This could sound the death knell for buy-to-let, at least with NatWest … something has clearly spooked the money markets.” |
| Meanwhile, TSB said that on Tuesday it would be reducing rates on selected two- and five-year deals by up to 0.4 percentage points across its residential and buy-to-let ranges. This may indicate it had priced its deals at higher than the market average. | Meanwhile, TSB said that on Tuesday it would be reducing rates on selected two- and five-year deals by up to 0.4 percentage points across its residential and buy-to-let ranges. This may indicate it had priced its deals at higher than the market average. |
| Nicholas Mendes, mortgage technical manager at broker John Charcol, said money market swap rates “have continued to see a steady increase, with no sign of falling, which is pushing lenders to continue to reprice”. | Nicholas Mendes, mortgage technical manager at broker John Charcol, said money market swap rates “have continued to see a steady increase, with no sign of falling, which is pushing lenders to continue to reprice”. |
| He added: “Last week Halifax and HSBC increased their fixed rates, with rates near or over 5% depending on the LTV [loan-to-value]. The pressure is on for homeowners to ensure they are quick to secure a rate if they are approaching the end of the their fixed rate or in the midst of a purchase application.” | He added: “Last week Halifax and HSBC increased their fixed rates, with rates near or over 5% depending on the LTV [loan-to-value]. The pressure is on for homeowners to ensure they are quick to secure a rate if they are approaching the end of the their fixed rate or in the midst of a purchase application.” |
| HSBC had said about lunchtime on Thursday last week that it would withdraw all its new business residential and buy-to-let products at 5pm that day, with deals becoming available again on Monday. However, about three hours later, in a sign of the fast-moving and chaotic market conditions, the bank said that “due to significant demand”, it would be removing the products from sale with immediate effect. | HSBC had said about lunchtime on Thursday last week that it would withdraw all its new business residential and buy-to-let products at 5pm that day, with deals becoming available again on Monday. However, about three hours later, in a sign of the fast-moving and chaotic market conditions, the bank said that “due to significant demand”, it would be removing the products from sale with immediate effect. |
| Some mortgage brokers complained they had been sitting in a queue, unable to get through to HSBC, for more than an hour until they received the updated notification. | Some mortgage brokers complained they had been sitting in a queue, unable to get through to HSBC, for more than an hour until they received the updated notification. |