UK mortgages: nearly 800 deals pulled amid interest rate fears | Mortgages

Nearly 800 residential and buy-to-let mortgage deals have been pulled during the past few days by UK banks and building societies amid concern surrounding future interest rate rises, data has revealed.

The figures from the financial data provider Moneyfacts also show rising rates for new fixed-term home loans, after last Wednesday’s inflation figures moved markets to bet that the Bank of England will raise the cost of borrowing beyond 5% this year.

The number of residential mortgage deals on sale has fallen by almost 7% in a week, down from 5,385 deals on 22 May to 5,012 on Tuesday morning – a reduction of 373 products.

In the buy-to-let sector, the volatility has had an even bigger impact, with the number of new landlord mortgages available dropping by more than 14% over the same period from 2,748 deals to 2,343 – a reduction of 405 products.

Households looking for a new mortgage deal had been warned to expect 5%-plus fixed-rate deals in the coming weeks after last Wednesday’s worse-than-expected inflation figures.

Moneyfacts said the average rate on a new two-year fixed mortgage rate had crept up from 5.34% on 22 May to 5.38% on Tuesday morning. At the start of May the average was 5.26%.

Similarly, the average new five-year fixed rate had nudged up from 5.01% on 22 May to 5.05% on Tuesday. At the beginning of the month it was 4.97%.

The data provider said in terms of residential mortgage providers, those that had pulled some of their fixed-rate mortgage deals over the past few days included Bank of Ireland UK, Halifax and several building societies. Aldermore, Foundation Home Loans and the Tipton and Coseley building society are among those that have withdrawn their entire fixed-rate ranges.

Rachel Springall, a finance expert at the data firm’s website Moneyfactscompare.co.uk, said those searching for a new home loan deal “may well be concerned about the latest developments in the mortgage market”.

She added: “Product choice has started to fall and, as may be expected, average fixed mortgage rates are on the rise … Consumers looking to refinance will find rates about 5% on average for a fixed deal, compared with about 3% a year ago.”