Mortgage crunch becomes mortgage desert

The fall of Bradford & Bingley and the second wave of the credit crunch have caused mortgage deals to fall off the market.
 
On Monday alone 11.4 per cent of all mortgage products were withdrawn – with 445 deals coming off the market, according to data from Moneyfacts.co.uk.
 
In total there are now just 2,988 residential mortgages available to borrowers and 481 buy-to-let deals.
 
"The buy-to-let sector has been hardest hit since the turmoil began with 85 per cent of products being withdrawn in a year, but residential mortgages are not far behind with a loss of 60 per cent of products," said Michelle Slade at Moneyfacts.
 
“Bradford & Bingley and Mortgage Express pulled their entire range, along with UCB Home Loans and The Mortgage Works, which have temporarily withdrawn their products due to unprecedented business volumes."
 
Halifax, Bank of Scotland Mortgages, Bristol & West Mortgages, Intelligent Finance and Newcastle BS have also all restricted the range of products that they now have on offer.
 
"This news will be another blow for mortgage borrowers, as not only do they now have a more restricted choice, but the insecurity in the money markets has caused many lenders to increase their mortgage rates," she said.
 
Ms Slade added the removal of deals by some lenders may also snow ball as others are forced to follow suit
 
“If more lenders decide to take the same stance and withdraw their range on a temporary basis, it is likely to cause a bottleneck for the remaining lenders," she said.
 
“As the pressure on these lenders increases, service is likely to suffer. As a result we may see further lenders being forced temporarily to withdraw their range."
 
She concluded: "It appears that lenders are slowly turning the tap off on the number of mortgage products available and their appetite to lend. If the problems continue we have to start asking the question, will the tap will be turned off completely until stable markets return?”