HSBC to raise UK mortgage prices for second time in a week
HSBC Holdings told brokers it will raise prices on UK residential and buy-to-let mortgages starting on Thursday (Jun 14), its second increase in under a week.
The bank said in an email that it will remove its current new business residential products from sale via brokers at 5 pm local time on Wednesday “in order to maintain service levels.” The changes will affect certain two-, three- and five-year fixed products.
“We’re firmly focused on supporting customers through current pressures and providing access to good deals,” a representative for HSBC said in an email. But since the cost of funds has increased in recent days, “we have had to reflect that in our mortgage rates” like other banks, the lender said.
HSBC said it was withdrawing other new business products offered via broker services last Thursday. The pressure is building fast amid a fresh jump in mortgage rates and a rush by lenders to pull products as bond yields rise to levels last seen in 2008. On Monday, Banco Santander paused some mortgage deals for new borrowers, while NatWest Group increased prices.
Coventry Building Society also told brokers it would pull products at 8 pm local time on Thursday and relaunch them at increased rates on Friday morning. The products include residential and buy-to-let offerings, Coventry said in an email.
“Big fish” are still buying but there are few purchases at under £5 million (S$8.5 million), said Loubie Vaughan, founder of real estate agent FG Consultants. “We’re advising people to take cash offers, everything is so uncertain,” she said by phone. “It’s definitely sagging. We are hearing of buyers chipping the price on the day of exchange.”
The average UK two-year fixed-rate mortgage was 5.9 per cent on Wednesday, according to Moneyfacts Group. That’s the highest since December, when rates were easing back after an ill-fated government budget fuelled a market meltdown.
On top of that, faster-than-expected wage growth on Tuesday pushed traders to ramp up bets on future BOE hikes. Now, all eyes are turning to a crucial moment next week, when inflation figures and a Bank of England policy decision could combine to set the scene for larger house price declines. BLOOMBERG
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