Over 2,000 products withdrawn this month

Lenders have withdrawn over 2,000 products in the past month, says eMoneyfacts.co.uk.

Denise Harvey, mortgage analyst at eMoneyfacts.co.uk, says smaller building societies that had escaped much of the pain of the liquidity crisis are now being affected with full out withdrawals replacing increases in rates or tightened criteria.

She says: “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 7,726 to 5,700, a staggering drop of 2,026 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.

She adds: “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.”