By Lawrence White LONDON, March 10 (Reuters) - British banks withdrew more home-loan products on Monday than on any day since the 2022 mini-budget turmoil, data from financial services provider
UK Banks Withdraw Highest Number of Mortgage Products Since 2022 Due to Iran Crisis
Impact of Iran Crisis on UK Mortgage Market
By Lawrence White
Record Number of Home-Loan Withdrawals
LONDON, March 10 (Reuters) - British banks withdrew more home-loan products on Monday than on any day since the 2022 mini-budget turmoil, data from financial services provider Moneyfacts showed, as the Iran crisis sent energy prices and UK borrowing costs soaring.
Lenders withdrew 308 residential mortgage products from the market on March 9, compared with 935 pulled on September 27, 2022, when a new government under then-Prime Minister Liz Truss announced huge tax cuts funded by borrowing.
Consequences for Borrowers and the Market
The renewed turmoil in Britain's home loan market, where prices had been edging down in recent weeks, shows how the conflict in Iran is having consequences far from the Middle East, as it pushes up yields on British government bond and swap markets on which mortgage prices are based.
Monday was the biggest single-day fall in the market since that record day in 2022, apart from July 23, 2024, when a single specialist lender streamlined its products, Moneyfacts said.
Lender Reactions and Future Outlook
The mortgage market turmoil this week marks "a sharp and sudden adjustment by many lenders reacting to rapidly rising swap rates," said Adam French, head of consumer finance at Moneyfacts.
Some of those products could return as lenders adjust to higher rate expectations, he said, but the development would nonetheless hit borrowers hard and rate rises will now depend on how global markets and inflation react to the Iran crisis.
"We're likely to see another wave of lenders withdrawing or repricing deals over the coming days, including some who only increased rates last week," said Nicholas Mendes, mortgage technical manager at broker John Charcol.
Reporting Credits
(Reporting by Lawrence White, additional reporting by Iain WithersEditing by Gareth Jones)
