Mortgage choice falls as deals are pulled from sale

Since last week almost 7% of mortgages have been withdrawn from market.

Over the past few days, we have seen a few lenders withdraw selected fixed mortgages from the market, at least temporarily. This volatility is down to the concerns surrounding future interest rate hikes, and lenders are reassessing their propositions.

Fresh concerns over potential further interest rate hikes surfaced last week when the Office for National Statistics (ONS) released its latest inflation figures for April. Despite reporting a drop in inflation, core inflation increased and food prices remain stubbornly high.

As a result, there are fresh concerns that the Bank of England may not be at the end of its rate hike cycle. This concern has fed into the price of mortgages, with swap rates also increasing.

Since the beginning of last week, 373 mortgages have been removed from the market, with this figure representing almost 7% of the market.

Currently consumers looking to refinance will find rates around 5% on average for a fixed deal, compared to around 3% a year ago.

Landlords will be disappointed to see a drop in product choice and that average fixed rates are on the rise.

The volatility surrounding interest rates towards the tail end of 2022 started to improve, but as it stands, average rates are expected to keep climbing because of the ongoing concerns over future interest rate hikes.

Buy-to-let product choice dropped below 1,000 deals in October last year, in the aftermath of the fiscal announcement, so it will be a concerning echo of that period if choice plummets to such a low again. Interest rates are only part of the decision-making process when entering a buy-to-let investment, so it is always wise to seek advice to ensure it is the right time to commit to a deal.