Print friendly version 27 Mar 2008

Mortgages continue to disappear

A total of 2,026 mortgage products have disappeared from the market over the last month alone, according to the latest research.

A survey published by financial comparison site Moneyfacts revealed the number of mortgage products across the residential and buy-to-let markets have fallen to 5,700 from 7,726 over the past month.

Smaller building societies – a group of lenders that previously seemed to have escaped the worst of the credit crunch according to Moneyfacts – have been withdrawing products or restricting their lending to direct business or local areas over the past two weeks.

Denise Harvey, mortgage analyst at Moneyfacts, said: “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.

“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.”

She added: “These changes show that no one has escaped the effects of the credit crunch this time. Whether you are a prospective first-time buyer or an existing borrower coming off a deal, there will certainly be less choice out there, especially from the smaller building societies.”

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