Banks hike mortgage interest rates amid boom in applicants

Essex Home Finance
Banks are reportedly hiking mortgage interest rates in order to deter prospective buyers.
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Banks are reportedly hiking mortgage interest rates in order to deter prospective buyers as they struggle to meet a spike in demand for home loans amid a buoyant housing market. 

Lenders are turning away mortgage business as the ability to process applications has been slowed by home-working during the coronavirus pandemic.

The housing market has boomed since restrictions were lifted in May, aided by the government’s decision to introduce a stamp duty holiday.

An executive at one of the UK’s largest mortgage lenders told the Financial Times that recently it had been receiving more than double the number of applications it would normally be able to process.  

This is as busy as I’ve seen the market since 2008, just before the credit crunch,” the executive told the paper.

“Post-lockdown, in late May to June, we were busy, heading back towards [normal] numbers, but the stamp duty change, when that dropped, put a massive urgency into buying a home.” 

“Metro Bank has temporarily halted registrations from new brokers looking to send clients to the lender to give it time to process existing applications amid “exceptional demand”. 

Halifax, TSB, Nationwide, Natwest, Barclays, and Yorkshire and Chelsea building societies have hiked interest rates over the past three weeks in a bid to deter applicants, despite the Bank of England base rate remaining at a record low of 0.1 per cent.

Original Article from CityAM 24/10/20

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