600 mortgage products withdrawn in just one week

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by Lin Freestone

According to research carried out by Moneyfacts, the personal finance researcher, almost 600 mortgage products were withdrawn from the market last week, making borrowing even more difficult for potential homeowners.

Banks and building societies pulled their deals rapidly following the nationalisation of Bradford & Bingley at the beginning of the week.

At the start of the week there were 3,983 home loans available on the market, but this had fallen to 3,402 by the end of business on Friday, the lowest number ever recorded by Moneyfacts.

In addition, mortgage rates increased during the week. Moneyfacts reported that the average two-year fixed rate deal has increased from 6.26% to 6.33%.

Moneyfacts reported that for the last couple of months rates have been slowly improving and more lenders have returned to the market. It is considered quite alarming how quickly the market has deteriorated once again.

Speculation is that there is further pressure on the Bank of England to cut interest rates, with some leading economists predicting the bank could take the radical step of slashing rates from 5% to 4.5%.