Banks Withdraw Mortgages
The growing liquidity and credit crisis has led to a large drop in the number and type of available mortgages.Very few 100%+ mortgages are now available.
Halifax, the largest lender, increased the rates on some of its tracker mortgages by up to 0.3 percentage points.
Rates on fixed-rate deals have also been increased. Scottish Widows pulled its two- and three-year fixed rate mortgages and all of its buy-to-let range.
UCB, part of Nationwide, also pulled all its rates at a few hours' notice. Capital Home Loans stopped offering loans to buy-to-let investors wanting to buy newly built apartments.
Abbey also announced that investors would need a deposit of at least 35 per cent of the value of any new-build property before it would offer a mortgage.
This is another blow to the buy-to-let market, which has seen the value of some new apartment blocks in Leeds, Manchester and Norwich fall substantially.
The collpase of Bear Stearns has increased the cost of money on the wholesale markets, from where mortgage lenders raise their money for lending.
Melanie Bien, a director at the mortgage broker Savills Private Finance, said: "This is going to cause mortgage rates to keep on edging upwards. There is just no more money to lend."
Anyone with a £200,000 repayment mortgage, who took out a two-year fixed rate deal in March 2006 would have been paying £1,161 a month. The best equivalent deal now costs £146 more each month.
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