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Thursday, Dec 01, 2022

UK watchdog contacts banks following huge withdrawal of mortgage deals

UK watchdog contacts banks following huge withdrawal of mortgage deals

Britain's Financial Conduct Authority (FCA) has contacted lenders in the United Kingdom following the withdrawal of more than 1,600 mortgage products by most high-street lenders, the Financial Times reported on Thursday.
In the aftermath of finance minister Kwasi Kwarteng's fiscal plan that sent British financial markets into turmoil, the FCA was asking banks what options borrowers would have when their fixed-rate terms end, the newspaper said, citing people close to the matter. It said the regulator was concerned over borrowers' ability to pay interest rates above 5-6%.

Sheldon Mills, the watchdog's head of competition and consumers, said in a speech on Thursday that some 3.2 million customers have fixed-rate deals that are due to expire in the next two years.

On the mortgage products that have been removed in the past week, Mills said, "We are monitoring developments closely and will be working with industry to ensure that consumers are treated fairly during this period."

This comes as Halifax, the country's largest mortgage lender, said it was withdrawing its fee-paying mortgage products, while Virgin Money and Skipton Building Society also temporarily withdrew their entire ranges.

A record 935 mortgage products were pulled in Britain overnight on Tuesday, financial services provider Moneyfacts said.

In the wake of criticism, Prime Minister Liz Truss said on Thursday she would stick to the plan to reignite economic growth while Kwarteng said the plan was essential in helping reset the debate around growth.

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