British lenders pull mortgage deals

LONDON: British lenders have begun to withdraw mortgage deals as concerns rise that the Bank of England will have to hike interest rates to support the pound.

Lloyds Banking Group Plc said in an emailed statement that its Halifax subsidiary would make changes to its mortgage product range “as a result of significant changes in the cost of funding.”

The British lender has withdrawn the fee option from its product range, with changes set to take effect from today.

“There is no change to product rates, and we continue to offer fee-free options for borrowers at all product terms and loan-to-value ratio levels, but we’ve temporarily removed products that come with a fee,” a spokesperson for Halifax said in an emailed statement.

Virgin Money UK Plc said it would temporarily stop making home loans to new customers, citing volatile market conditions.

“Given market conditions we have temporarily withdrawn Virgin Money mortgage products for new business customers,” a spokesman said in a statement.

“Existing applications already submitted will be processed as normal and we’ll continue to offer our product transfer range for existing customers.

“We expect to launch a new product range later this week.”

The moves come with sterling and UK government debt markets roiled by Friday’s fiscal statement, which spooked global investors with talk of unfunded tax cuts.

Lloyds is the United Kingdom’s biggest mortgage lender and last year lent £307bil (US$327bil or RM1.5 trillion) to British homeowners, according to its annual report.

The moves were reported earlier by Reuters. — Bloomberg

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