https://sputnikglobe.com/20220927/market-tumult-prompts-uk-mortgage-lenders-to-withdraw-new-home-loans-1101255980.html
Market Tumult Prompts UK Mortgage Lenders to Withdraw New Home Loans
Market Tumult Prompts UK Mortgage Lenders to Withdraw New Home Loans
Sputnik International
On September 26, the pound plunged to all-time low against the US dollar a few days after UK Chancellor Kwasi Kwarteng announced the government’s tax-cutting... 27.09.2022, Sputnik International
2022-09-27T06:40+0000
2022-09-27T06:40+0000
2023-05-28T15:21+0000
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UK mortgage lenders have announced that they are temporarily withdrawing new home loans in response to the market volatility triggered by the government unveiling hefty tax cuts last week, funded by huge increases in borrowing, according to Reuters.Halifax, part of Lloyds Banking Group, the largest mortgage lender in Britain, said in a statement that it is scrapping its fee-paying mortgage products “as a result of significant changes in the cost of funding.”Another British mortgage lender, Virgin Money UK Plc, announced that it would temporarily stop making home loans to new customers, referring to the volatile market environment.The UK mortgage lender Skipton Building Society in turn told brokers that “following last week's [Bank of England] meeting and the government's subsequent mini-budget, we [the lender] continue to see the market response unfold.”This came as the Bank of England (BoE) and UK Treasury failed to calm financial markets, making it clear that investors will have to wait until November for a broader policy response to the fallout from the new government’s massive tax cuts in line with its mini-budget plan.The statement prompted the pound to fall again later on Monday, when the UK currency was down to $1.0671 from $1.082 before the BoE announcement. Earlier that day, the pound slid by almost 5% to an all-time low of $1.0327 during Asia-Pacific trade.The developments followed Chancellor Kwasi Kwarteng unveiling his emergency tax-slashing mini-budget that Prime Minister Liz Truss' new government is relying on to help UK households and businesses cope with the cost of living crisis.The package of measures includes £45 billion ($48 billion) in tax cuts, such as reversing the rise in National Insurance costs (introduced by former PM Boris Johnson's government in April to pay for social care and tackling the National Health Service backlog), scrapping the planned rise in the corporation tax from 19% to 25% percent, and removing green levies. Labour described Kwarteng’s mini-budget as a “comprehensive demolition” of the Conservative government’s last 12 years in power, with Shadow Chancellor Rachel Reeves claiming that the chancellor discredits the Tories’ “failed” economic policies.Reeves dubbed the mini-budget a “plan to reward the already wealthy”, arguing that Prime Minister Truss and Chancellor Kwarteng “are like two desperate gamblers in a casino chasing a losing run."
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kwasi kwarteng, government, pound, mortgage, united kingdom (uk)
Market Tumult Prompts UK Mortgage Lenders to Withdraw New Home Loans
06:40 GMT 27.09.2022 (Updated: 15:21 GMT 28.05.2023) On September 26, the pound plunged to all-time low against the US dollar a few days after UK Chancellor Kwasi Kwarteng announced the government’s tax-cutting mini-budget plan, aimed at helping No 10 resolve the country’s cost-of-living crisis.
UK mortgage lenders have announced that they are temporarily withdrawing new home loans in response to the market volatility triggered by the government unveiling
hefty tax cuts last week, funded by huge increases in borrowing, according to Reuters.
Halifax, part of Lloyds Banking Group, the largest mortgage lender in Britain, said in a statement that it is scrapping its fee-paying mortgage products “as a result of significant changes in the cost of funding.”
“There is no change to product rates, and we continue to offer fee-free options for borrowers at all product terms and LTV levels, but we’ve temporarily removed products that come with a fee,” Halifax pointed out.
Another British mortgage lender, Virgin Money UK Plc, announced that it would temporarily stop making home loans to new customers, referring to the volatile market environment.
4 September 2022, 11:01 GMT
“Given market conditions we have temporarily withdrawn Virgin Money mortgage products for new business customers. Existing applications already submitted will be processed as normal and we’ll continue to offer our product transfer range for existing customers. We expect to launch a new product range later this week,” a spokesperson said on Monday.
The UK mortgage lender Skipton Building Society in turn told brokers that “following last week's [Bank of England] meeting and the government's subsequent mini-budget, we [the lender] continue to see the market response unfold.”
This came as the Bank of England (BoE) and UK Treasury failed to calm financial markets, making it clear that investors will have to wait until November for a broader policy response to the fallout from the new government’s massive tax cuts in line with its mini-budget plan.
BoE Governor Andrew Bailey said that the bank is monitoring developments in financial markets “very closely” and policy makers “will not hesitate to change interest rates by as much as needed to return inflation to the 2% target sustainably in the medium term”. He added that the BoE will make a “full assessment” of the mini-budget and the sterling’s all-time fall at the bank’s next scheduled meeting in November.
The statement prompted the pound to fall again later on Monday, when the UK currency was down to $1.0671 from $1.082 before the BoE announcement. Earlier that day, the pound slid by almost 5% to an all-time low of $1.0327 during Asia-Pacific trade.
The developments followed
Chancellor Kwasi Kwarteng unveiling his emergency tax-slashing mini-budget that Prime Minister Liz Truss' new government is relying on to help UK households and businesses cope with the cost of living crisis.
23 September 2022, 10:37 GMT
The package of measures includes £45 billion ($48 billion) in tax cuts, such as reversing the rise in National Insurance costs (introduced by former PM Boris Johnson's government in April to pay for social care and tackling the National Health Service backlog), scrapping the planned rise in the corporation tax from 19% to 25% percent, and removing green levies.
Labour described Kwarteng’s mini-budget as a “comprehensive demolition” of the Conservative government’s last 12 years in power, with Shadow Chancellor Rachel Reeves claiming that the chancellor discredits the Tories’ “failed” economic policies.
She said that “the costs of the energy price cap will be funded by borrowing, leaving eye-watering windfall profits of the energy giants untaxed”, and that “working people are left to pick up the bill”.
Reeves dubbed the mini-budget a “plan to reward the already wealthy”, arguing that Prime Minister Truss and Chancellor Kwarteng “are like two desperate gamblers in a casino chasing a losing run."
