Proactive Investors - Santander (BME:SAN), the owner of Abbey National, has withdrawn nearly all of its mortgage deals in the UK as it reassesses the market ahead of more expected interest rate increases by the Bank of England.
The Spanish bank which bought Abbey in 2004 said it would remove all new business rates at 7.30pm tonight, with a new range launched on Wednesday.
A Santander spokesman said: “Due to current market conditions, we’re temporarily withdrawing all our new business residential and Buy to Let fixed and tracker rates at 7.30pm on Monday June 12."
“Our product transfer range will still be available. We’re relaunching our full new business range on Wednesday June 14.
Late Thursday last, HSBC (LON:HSBA) made a similar move as high street lenders continue to reappraise a rapidly moving market.
It comes as the Bank of England is forecast to raise interest rates to 5.5% by the end of the year, as policymakers battle to bring down stbborn inflation.
Bank of England official Jonathan Haskel, a member of the Monetary Policy Committee, said today that further increases cannot be ruled out because prices are still rising faster than the BoE’s 2% target.
“We are monitoring indicators of inflation momentum and persistence closely,” he wrote in the Scotsman newspaper.
“My own view is that it’s important we continue to lean against the risks of inflation momentum, and therefore that further increases in interest rates cannot be ruled out.”
The Centre for Economics and Business Research today estimated mortgage bills in London could climb by as much as £7,300, while 3.5mln borrowers across the UK are facing higher payments.
Nationally, homeowners will have to spend nearly an extra £9bn in interest over 2023 and 2024 as they are forced to refinance at rates that are double what they are used to, the CEBR said.