Frightened banks pull mortgage deals

Recent figures have shown that since the start of October hundreds of mortgage deals have been pulled off the shelves by lenders who are becoming increasingly nervous in the current difficult financial market. Over the past year thousands of mortgage products have been taken off the shelves as lenders have become more and more concerned about lending money out.

And in the past month alone, which has seen a number of major events unfold such as the part nationalisation of Bradford & Bingley, and the Icelandic banking collapse, around eight hundred products have been removed by lenders.

Just a year ago consumers could choose from around ten thousand different mortgage products from a range of lenders, but by the start of October this had fallen by two thirds to around four thousand. However, in the past few weeks these numbers have fallen again, and some of the most attractive deals on mortgages have been snatched off the shelves by lenders, with the number of mortgage products available from lenders falling to just over three thousand.

One industry official stated: “Property values are still falling and there is no indication when they will bottom out. Fears of negative equity and diminishing values of supporting security has resulted in providers offering more mortgages requiring a minimum deposit of 40 per cent.”

Officials said that there has been over an 80% rise in the number of mortgages that require a deposit of 40% from the borrower, and this has reduced choice even further for first time buyers with little or no deposit.

However, some officials think that there are still plenty of good deals around for those with decent credit who take the time to compare and shop around, which is something that they can do online. One industry professional stated: “Choice may be reducing, but there are still enough products out there for borrowers to find a deal”.