Posted on 09/27/2022 1:18:13 PM PDT by EBH
Virgin Money and Skipton among those to suspend loans as wholesale rates whipsaw
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Some of the UK’s biggest mortgage lenders, including Virgin Money and Skipton Building Society, have stopped offering new home loans in response to the market volatility triggered by the government’s mini-Budget.
Halifax, part of Lloyds Banking Group, the biggest mortgage lender in the UK, is also withdrawing a range of new home loans, it told brokers.
The pause in new lending comes after yields on UK bonds rose sharply following the tax cuts announced on Friday by chancellor Kwasi Kwarteng.
“This is the first time we’ve seen a major withdrawal of products and repricing in the mainstream market since the global financial crisis,” said Ray Boulger, an analyst at mortgage broker John Charcol.
“The huge rise in gilt yields means lenders have to reprice mortgages very significantly. I expect by next week there will be very few mortgage deals available with rates under 5 per cent. Any lender who hasn’t pulled out yet is almost certainly going to on Tuesday.”
He said other lenders to have withdrawn new mortgage products include Nottingham Building Society, Bank of Ireland, Leeds Building Society and Paragon Bank.
Paragon chief executive Nigel Terrington told the Financial Times: “We pulled our new fixed-rate deals today because they’re all priced off swap markets, and they have risen dramatically in the past 48 hours.”
(Excerpt) Read more at ft.com ...
(since the global financial crisis)
Just wait for Part Deux baby.
That’s why some seem to want World War IV.
Tucker Carlson nailed it the other night.
“ The pause in new lending comes after yields on UK bonds rose sharply following the tax cuts announced on Friday by chancellor Kwasi Kwarteng.”
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If I’m understanding this property, actual interest rates have dropped sharply. If I was in line for a mortgage there currently I’d also want to pause to pay a lower rate. But that’s merely an educated guess.
Oh, never mind. Interest rates actually rose sharply there.
If you were in line for the lower interest rates...pause...now you have to pay the high rate. Plus I do not think their loans function like ours do. I think their rates are only good for few years and then renegotiate...
“Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy.”
Well, at least you were polite enough to copy the copyright notice :D
Well that’s one way to crush the housing market. No demand (because the buyers can’t get loans) so the supply has to be discounted to sell. Unfortunately it just means those with lots of cash can get a deal.
Fair Use Act covers it as FR doesn’t have a “sharing” option and we’re excerpted.
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