UK banks withdraw first-time buyer mortgages in wake of mini-Budget
Banks have withdrawn 60 per cent of mortgages for borrowers with small deposits since the start of the year, making it harder for first-time buyers to get a foot on the property ladder.
A number of lenders have either pulled home loans or have yet to return with their 95 per cent loan-to-value products following former chancellor Kwasi Kwarteng’s “mini” Budget on September 23, according to data from consumer site Moneyfacts.
The sell-off in UK government bonds in the wake of the chancellor’s statement pushed up the cost of fixed-rate mortgages, with most banks withdrawing products for new customers across a range of deposit sizes. Home loans requiring small deposits have been hit the hardest, as lenders have sought to retreat from the riskiest part of the market.
Rising rates have added to the pressure on lower-income borrowers. The average rate for a 95 per cent loan-to-value mortgages is 6.64 per cent, up from 3.06 per cent at the start of the year, according to Moneyfacts.
This story originally appeared on: Financial Times - Author:Emma Dunkley
