According to figures from Moneyfacts, this was the more than double the previous record fall of 462 on 1 April 2020, which was the start of UK lockdowns due to the pandemic.
Figures also showed that the largest falls were in two and five-year fixed rates, with both contracting by 344 and 357 respectively.
The total number of two-year fixed rates at all loan to values (LTV) stands at 590, and five-year fixed rates are at the 734 mark. Both were near or above 1,000 previously.
Moneyfacts noted that products were being removed fairly evenly across LTV tiers up to 95 per cent. This compares to the pandemic when lenders ceased lending at higher LTV tiers due to uncertainty around unemployment and arrears.
Lenders have been temporarily pulling product to reprice them due to the falling pound, soaring swap rates and base rate increases.
Swap rates have been especially volatile, with sources saying typical increases are around five to 10 basis points, but they have been increasing by 100 to 150 basis points in a short period of time.
As of 5pm UK time, two-year swap rates are at 5.28 per cent, marginally down from 5.36 per cent yesterday and five-year swap rates have fallen slightly from 4.88 per cent yesterday to 4.81 per cent today.
The fall in products and repricing has led brokers to urge customers to act quickly to secure deals and have documents ready to go to secure deals.
‘Market remains open’
Chris Sykes, technical director at Private Finance, said whilst “tons of products” had gone, the key thing was it was a “pause not a stop”.
“Lenders have plenty money to lend, they just don’t know what to lend it at in terms of interest rates.”
He said that some were using a fund booking system, but that they were often “inundated” and sold out by 9am.
Sykes continued that speaking to several lenders, this removal and repricing could go on for several days.
“The issue is that things are moving so quickly we keep seeing rates disappearing as soon as we quote them…There are still plenty of options, but [the issue] is getting those options, those options moving so quickly and lot of other options being removed as well.”
He said that the possible consequence could be that applications that get submitted now, depending on rates and how they settle, could have a better rate in two weeks time and so the entire application could have to be done again.
He continued: “It is still possible to get a mortgage…there are mortgages to get, it is just pretty tricky to find the right one. I don’t know how you would do it without a broker right now because it is so complex.”
David Hollingworth, associate director of communications at L&C Mortgages, added that the drop in products was to be expected as some lenders step back from “volatile conditions” and others have “slimmed down their new business range substantially”.
He said that the “market remains open” and many were maintaining rates, so advisers should “be trying to secure the best available [rates] for their customers in difficult and fast changing conditions”.
He continued: “I expect that those that have withdrawn will want to see a little stability in funding costs to enable them to make decisions about where the level might be for new customers.
“In the meantime, borrowers and advisers face a reduced range of options but can really only deal with what is at their disposable.
Although lenders will look to relaunch there’s little to suggest that those won’t be at a higher rate.”
