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3 Aug 2021


Credit crunch hits smaller mortgage lenders

Over the last few weeks we have seen more changes in the mortgage market time than ever before. Denise Harvey, mortgage analyst from moneyfacts.co.uk, looks at what has been going on.

“It seems that there is no stopping it. Over the last two weeks, lenders have been even more ruthless in withdrawing products from the market and/or tightening their criteria. Over the last month alone we have seen the number of mortgage products available across residential and buy-to-let plunge from 7726 to 5700, a staggering drop of 2026 products.

“Until a couple of weeks ago it seemed that smaller building societies had escaped the worst. By funding their lending through deposits, they appeared to be immune from the problems facing the money markets. The last two weeks, however, have shown a very different story.  

“Instead of increasing rates or tightening criteria, the smaller building societies such as Bath BS and Tipton and Coseley BS have either been withdrawing their products from the market completely or restricting their lending to direct business or local areas.

“Due to larger institutions increasing rates and becoming more reluctant to appear competitive, smaller lenders have seen an increase in demand; something they neither want nor can cope with.

“Traditionally, local building societies have attracted the majority of their business from the local area. In order to maintain presence and competitiveness in that area, they are having to close their doors to those from outside the region who are unable to secure a mortgage from the larger lenders.


Mortgage Lenders who have withdrawn their mortgage range

Mortgage Lenders who have restricted their lending area

Mortgage Lenders who have restricted their criteria

Bath BS – range withdrawn

Holmesdale BS – restricted to local area

Coventry BS – max LTV within self-cert range now 65%

Dunfermline BS - 100%, 105% & 110% range & 2 & 5 year fixed rates withdrawn

Mansfield BS – restricted to direct business only

Intelligent Finance – max loan to value within range reduced to 90%

Bradford & Bingley – 100% range withdrawn

Melton Mowbray – intermediary applications within 30 mile radius, direct applications within 50 mile radius

Manchester BS – LTV reduced to max 60% on selected trackers and fixed rates

Buckinghamshire BS – tracker rates withdrawn

Newbury BS – restricted to local area

Newbury BS – restricted max advance on discounts & trackers to £500K

Earl Shilton BS – range withdrawn

Tipton & Coseley BS – restricted to direct business only within local area

Newcastle BS – reduced max LTV to 90%

Mansfield BS – short term discounted rates withdrawn


National Counties BS – Max LTV reduced to 75%, min property valuation £125K

Monmouthshire BS – range withdrawn


Standard Life Bank – Max advance on any application £500K

Shepshed Bank – range withdrawn


Halifax – reduced max LTV from 97% to 95%

Standard Life Bank – 2 year trackers, 2 year fixed, 2 & 3 year professional rates all withdrawn. 95% products within 3, 5 & 10 year range withdrawn



Bristol and West – All products for professionals withdrawn



Moneyfacts.co.uk – 26.3.08

“Not only is this withdrawal of products shocking in itself, the speed at which the products are coming off the shelves has also been surprising. In one day we heard from 19 lenders that have made the decision to withdraw products or restrict criteria. Who knows what tomorrows news will bring?

“These changes show that no one has escaped the effects of the credit crunch this time. Whether you are a prospective first time buyer or an existing borrower coming off a deal, there will certainly be less choice out there, especially from the smaller building societies.


Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry. 



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