A sharp decline in the availability of Mortgage deals has been witnessed over the last week, recent data reveals. On the 30th May, Moneyfactscompare.co.uk recorded 5,012 fixed and variable rate mortgage products, a notable drop from the 5,385 offers available just a week prior.

The financial data website attributed this drop to several providers withdrawing selected fixed mortgage products over the past few days. Some have even removed their entire fixed rate range due to escalating borrowing costs, a direct outcome of the Bank of England’s recent interest rate hike.

However, despite this downturn, the current number of mortgage products is still more than twice the 2,258 deals that were available in October of the previous year, a period that saw a significant withdrawal of products amid market upheaval post-mini-Budget.

Rachel Springall, a finance expert at Moneyfactscompare.co.uk, expressed her concerns over the developments in the mortgage market: “Borrowers looking for a new deal are likely to be troubled by recent events. In the past few days, we’ve seen several lenders withdraw selected fixed products, with some temporarily exiting the market. Product choices are dwindling and, as expected, average fixed mortgage rates are trending upward.

“This fluctuation is largely due to concerns over potential future interest rate hikes, leading lenders to reassess their propositions. Consumers seeking to refinance will find rates averaging around 5% for a fixed deal, a significant increase from around 3% a year ago. It’s crucial that borrowers seek advice to understand the situation and find a mortgage that fits their circumstances.”

The buy-to-let market hasn’t been immune to this trend either, with lenders withdrawing fixed deals and average rates going up. Companies such as Precise Mortgages, Kensington, Kent Reliance, Hodge, and Marsden Building Society have pulled selected fixed mortgage products recently. Others like Aldermore, Bank of Ireland UK, CHL Mortgages, Fleet Mortgages, Foundation Home Loans, and The Mortgage Lender have withdrawn their entire fixed rate range.

In the past week, the number of buy-to-let mortgages has decreased from 2,748 deals to 2,343. Since the beginning of May 2023, the average rates for two- and five-year fixed buy-to-let mortgages have increased to 5.61% and 5.52% respectively.

Springall further added: “Landlords will be disappointed to see a reduction in product choice and rising average fixed rates. The instability around interest rates, which had begun to improve at the end of 2022, is again causing concern with average rates expected to continue to rise due to apprehensions over future interest rate hikes.

“The number of buy-to-let product choices fell below 1,000 deals in October last year following the fiscal announcement, and any return to such low levels will undoubtedly cause concern. Interest rates are only one factor when making decisions about buy-to-let investments, so it is always sensible to seek advice to ensure it’s the right time to commit to a deal.”

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