HSBC and Clydesdale Bank have announced a temporary withdrawal of certain mortgage products due to interest rates not dropping as quickly as expected.
On Friday (June 9), HSBC announced that it has removed all its “new business” residential and buy-to-let products, with the deals expected to be available again today (June 12).
Clydesdale Bank also announced that it had made the decision to temporarily withdraw new business mortgage products as of 5pm on Friday, with the launch of a new range of products expected from the start of business on Tuesday (June 13).
Cornerstone Group International chairman, David Hannah, said: “The rise in mortgage rates and mortgages being pulled by lenders due to inflation figures being stronger than expected is unwelcome news for homeowners, especially first-time buyers.
“This is being done in anticipation of an expected rise in interest rates which will cause borrowers more issues when looking to purchase a property.
“We are already seeing record levels of unaffordability in the UK property market and lenders such as HSBC withdrawing mortgage deals is only going further to exacerbate the situation for potential buyers in the property market.”
These announcements come after nearly 10 per cent of mortgages have been taken off the market due to concerns about increasing interest rates, according to data from Moneyfacts.
The figures indicate that approximately 800 residential and buy-to-let deals have been withdrawn, and average rates on two-and-five-year fixed deals have also risen.
In addition, the Nationwide building society announced that mortgage rates on new fixed deals would increase by up to 0.45 percentage points in response to higher-than-expected inflation figures.
A slower-than-expected decline in inflation has led to predictions of a potential interest rate hike by the Bank of England, with estimates suggesting a rise from the current rate of 4.5 per cent to as high as 5.5 per cent.
The impact of the slow decline of interest rates can be seen through data from Moneyfacts, which found that the average two-year-fixed-rate mortgage has increased from 5.49 per cent to 5.82 per cent since the beginning of June.
tom.dunstan@ft.com
