Virgin, Skipton, Halifax pause new mortgages

Virgin Money and Skipton Building Society on Monday temporarily withdrew their mortgage ranges for new customers because of the volatility in sterling funding markets, according to a Reuters report, citing emails sent to brokers.

Earlier on Monday, Halifax said it had withdrawn its mortgage products with arrangement fees.

The pause in new lending comes after yields on UK government bonds soared following the tax cuts announced on Friday by finance minister Kwasi Kwarteng.

Ray Boulger, analyst at mortgage broker John Charcol, said: “This is the first time we’ve seen a major withdrawal of products and repricing in the mainstream market since the global financial crisis.

“The huge rise in gilt yields means lenders have to reprice mortgages very significantly.

“I expect by next week there will be very few mortgage deals available with rates under 5 per cent.

“Any lender who hasn’t pulled out yet is almost certainly going to on Tuesday.”

Virgin Money said in its email to brokers: “Following a number of changes in the market, we have made the decision to temporarily withdraw all our products for new customers at 8pm tonight.

“We continue to monitor the situation closely and currently plan to relaunch products for new customers towards the end of the week.”

Virgin Money and Skipton Building Society temporarily withdrew their entire ranges, according to emails sent to brokers seen by Reuters.

UK finance minister Kwasi Kwarteng sent sterling and government bonds into freefall on Friday with a “mini-budget” that was designed to grow the economy by funding tax cuts — but will be financed via huge increases in government borrowing.

“As a result of significant changes in the cost of funding, we’re making some changes to our product range,” a Halifax spokesperson said.

Skipton Building Society said in an email to brokers: “Following last week’s (Bank of England) meeting and the government’s subsequent mini-budget we continue to see the market response unfold.

“In response, we will be temporarily withdrawing our New Business Product Range with immediate effect.”