At midday, HSBC issued a note to brokers informing them that its new business residential and buy-to-let products would be taken off the market by 5pm.
It continued: “If we need to remove our product range before the end of the day, we will send another notification to inform you.”
The bank said products would not be available again until 12 June, after changes had been made.
Meanwhile, Nationwide announced that it would be giving brokers until 8pm today to reserve current rates as pricing will increase across select two, three and five-year fixes from tomorrow.
‘Broker diaries thrown out the window’
Jamie Lennox, director at Dimora Mortgages, said more needed to be done so lenders could give a 24-hour notice period at minimum to allow clients to consider their options.
He added: “Shorter notice periods will lead to an influx of poorly packaged cases that will result in more hours being lost by underwriters having to assess the case multiple times while they wait for documents to come in. With these short windows to submit, there is a real risk that more fraudulent cases slip through the net as brokers scramble to get apps submitted without completing proper due diligence.”
Lewis Shaw, owner and mortgage broker at Riverside Mortgages, said this was one thing the sector did not want to see happen again.
He said broker diaries had been “thrown out the window” as they rushed to secure rates before they rose.
Shaw added: “If there was ever a reason to get behind the #24HourPledge campaign, this is it. The mortgage market right now is in a state of chaos and lenders need to think through the impact this kind of negligible notice period has on brokers and consumers alike.”
Riz Malik, founder and director at R3 Mortgages, said the announcements “underscored the turbulent times” in the market.
He added: “Earlier today, I had the opportunity to speak with the head of intermediaries at Coventry Building Society [Jonathan Stinton], gaining insight into their dedication to providing a 48-hour notice period. We sincerely hope other lenders will heed our calls and initiate a dialogue with the broker community. I also hope other networks will join New Leaf Distribution and support us.”
Backing for 24-hour pledge rises
Mortgage network New Leaf Distribution was the latest company to confirm its support for Lennox and Malik’s campaign to require lenders to give at least 24 hours’ notice before making significant product changes.
Daniel Hobbs, managing director of New Leaf, said: “New Leaf backs the 24-Hour Pledge. We understand the challenges in the market at present but it very important that lenders are mindful of the impact they are having not only on advisers but also our consumers when withdrawing products at very short notice. With Consumer Duty around the corner, the 24-Hour Pledge from lenders gives them a chance to win back confidence and trust within the industry and wider market.”
Trade bodies weigh in
Trade bodies Association for Mortgage Intermediaries (AMI) and Intermediary Mortgage Lenders Association (IMLA) also weighed in on the discussion.
Kate Davies, executive director at IMLA, said this was frustrating for brokers, lenders and customers but said these decisions were only made where “absolutely necessary”.
She said: “The root cause is the current volatility in the swaps market, combined with the continuing speculation about further rises in Bank of England base rate.
“In practice, we do not think there could ever be a ‘one size fits all’ approach to giving notice of the withdrawal of a particular product. This is due to different lender funding strategies, which will drive the need for some lenders to move very quickly in order to remain prudent and profitable when there are large and sudden increases to funding costs.
“IMLA members do take this issue very seriously and will continue to do their best to give brokers as much notice as is reasonably possible when a product is about to be withdrawn. We all look forward to a less bumpy outlook when interest rates and markets settle down.”
Robert Sinclair, chief executive at AMI, said the body acknowledged the volatile market conditions and the need for lenders to protect pipelines.
However, he backed the demand of brokers and said the body would work with IMLA to find a solution.
Sinclair said: “We recognise that a mandatory minimum notice period might be difficult for many, but we ask lenders to think about their broker partners and their current and potential customers by giving as much notice as possible. It would be preferable if withdrawal periods could be measured in hours and not minutes, with thought given to when cut-offs are announced, not at weekends or late in the day. It would be helpful if lenders could commit to try to give 24 hours’ notice, with both announcement and deadline falling between 9-5 Monday to Friday. That would be of great benefit to all.
“We will continue to work with IMLA to see if we can establish some industry guidelines and best practice that all firms can support.”
The 24-Hour Pledge makes a series of recommendations, including lenders giving advance notice before removing products, committing to clear communication when changes are made, supporting brokers in minimising disruption and reviewing the pledge to make sure it is always relevant.
A LinkedIn page has also been set up for industry figures to join the campaign.
