Banks are raising mortgage interest rates to deter potential buyers as they struggle to meet an increase in demand for home loans amid a heated housing market.
Lenders are refusing the mortgage business, as the ability to process applications has declined due to housework during the coronavirus pandemic.
The housing market has grown a lot since restrictions were lifted in May, helped by the government’s decision to introduce a stamp duty holiday.
An executive at one of the UK’s biggest mortgage lenders told the Financial Times that he recently received more than double the number of orders he would normally be able to process.
“This is the busiest I have seen the market since 2008, just before the credit crisis,” said the executive to the newspaper.
“Post-blockade, at the end of May to June, we were busy, going back to [normal] numbers, but the change in stamp duty, when it fell, put enormous urgency in the purchase of a home. ”
Metro Bank has temporarily suspended registrations for new brokers who want to send customers to the creditor to give it time to process existing applications amid “exceptional demand”.
Construction companies Halifax, TSB, Nationwide, Natwest, Barclays and Yorkshire and Chelsea have raised interest rates in the past three weeks in an attempt to dissuade applicants, despite the Bank of England base rate remaining at a record low of 0, 1 percent.