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Small lenders buckle under demand, with Accord pulling all deals again

Accord Mortgages’ decision to pull its product range for the second time in a month has sparked fears that smaller lenders are struggling to cope with demand.

Accord withdrew all its residential products last week to maintain service levels after receiving a high volume of applications. It is expected to replace the products at some point this week.

And earlier last month the lender temporarily withdrew its 75% and 85% LTV mortgages before relaunching with higher rates.

Meanwhile, Skipton Building Society pulled its residential intermediary range from February 14 to 29 due to high demand.

David Copland, chief executive of Pink Home Loans, says smaller societies have been picking up demand from big lenders but in the last few months they have struggled to cope.

He says: “A lot of societies have come out with great rates this year, but the problem is that the top five lenders are scaling back lending and this is creating higher than expected demand for smaller players.

“They do not have the infrastructure or the funding to cope with such demand and the concern is that they will achieve their lending targets early and more or less withdraw from the market in the second half of the year.”

Paul Darwin, head of intermediary lending at Skipton, says: “The reduction in lending among some of the bigger players has resulted in increased volumes for second tier lenders like ourselves in recent weeks.

“We were anxious to ensure this did not negatively impact on our service and therefore took the decision to withdraw our products for a short period.”

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