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Ripple effect sees small lenders pull mortgages

Product withdrawals from big lenders are having a ripple effect, with now even the smallest building societies having to withdraw deals.

Last week Mortgage Strategy reported that a reduction in lending from high street banks had caused Accord Mortgages and Skipton Building Society to temporarily pull their entire mortgage ranges, and now lenders even further down the hierarchy are suffering a similar fate.

After Accord and Skipton withdrew their products for a couple of weeks last month following exceptionally high demand, small societies have found themselves inundated with enquiries.

Hinckley & Rugby Building Society has withdrawn its entire range apart from one residential product and several limited distribution buy-to-let deals, while Nottingham, Coventry and Principality building societies have withdrawn or repriced deals in recent weeks.

Chris White, chief executive of Hinckley & Rugby, says the society hopes to relaunch its products by the end of March.

He says: “In all my experience in the industry I can’t recall anything like this happening. The big lenders have pulled back which has had a ripple effect, first on lenders like Skipton and now us.

“We hope to be back shortly and with competitive products but it depends on what happens in the rest of the market.”
He adds: “As a small lender we don’t set the pace – if the bigger lenders price upwards we have little choice but to follow suit.”

Meanwhile, Principality has slimmed down its residential and buy-to-let offerings.

A spokeswoman for the society says: “Following repricing and withdrawals from nine or 10 larger lenders we have experienced increased demand and made the decision to slightly reduce our range to maintain service.”

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