|
The News feed section of our website has been
provided by a 3rd party and as such we are not responsible for its content
or accuracy
Credit crunch hits smaller lenders
Updated figures from financial information provider, Moneyfacts, show further product withdrawals from the mortgage market as the credit crunch continues to bite. Over the last month alone the number of mortgage products available across residential and buy-to-let has plunged from 7726 to 5700, a drop of 2026 products.
Up until a couple of weeks ago smaller building societies had seemingly escaped the worst. By funding their lending through deposits, they appeared to be immune from the problems facing the money markets. The last two weeks, however, have shown a very different story. Indeed, instead of increasing rates or tightening their lending criteria, the smaller building societies, such as Bath BS and Tipton and Coseley BS, have either been withdrawing their products from the market completely or restricting their lending to direct business or local areas.
Due to larger institutions increasing rates and becoming more reluctant to appear competitive, smaller lenders have seen an increase in demand; something they neither want nor can cope with, says Moneyfacts.
Traditionally, local building societies have attracted the majority of their business from the local area. In order to maintain presence and competitiveness in that area, they are having to close their doors to those from outside the region who are unable to secure a mortgage from the larger lenders.
Apart from Bath BS and Tipton& Coseley BS, other building societies to withdraw their mortgages include Earl Shilton and Monmouthshire. Mansfield BS has withdrawn its short term discounted rates.
Buckinghamshire BS meanwhile has withdrawn its tracker rates, while Dunfermline BS has shelved its 100%, 105% & 110% (LTV) range, as well as 2 & 5 year fixed deals.
Elsewhere, Standard Life Bank has removed 2 year trackers, 2 year fixed, 2 & 3 year professional rates, as well as 95% products within its 3, 5 & 10 year range. Bristol & West has withdrawn all products for professionals.
On the lending front the maximum LTV within the self-cert range at the Coventry BS is now 65%, while Intelligent Finance now offers a maximum LTV of 90%.
Manchester BS has reduced the LTV to a maximum 60% on selected trackers and fixed rates, while Newbury BS is now restricting the maximum advance on discounts and trackers to £500K.
Meanwhile, the maximum LTV at Newcastle is 90%; 75% at National Counties BS - the latter also imposing a minimum property valuation of £125K. Halifax has cut its maximum LTV from 97% to 95%
|