Several mortgage lenders based out of the United Kingdom have made the decision to stop issuing some of their mortgage deals out to customers due to the ongoing financial situation within British bond markets. Lenders like Skipton Building Society put at least a temporary hold on their mortgage offerings for all new customers while others are aiming to stop the issuance of mortgage products that typically provide lower interest rates than normal. The lenders have all said the same thing, generally – that uncertainty in the market has created a great deal of change in mortgage market pricing. Since new finance minister Kwasi Kwarteng announced his mini-budget last week that would push trick-down economics and produce significant tax cuts, the British market has been in a tailspin.
The British pound has plummeted against the US dollar and the yield on the UK 10-year gilt has moved higher than it has been in nearly fifteen years. The Bank of England has indicated that it would continue to raise interest rates to combat inflation and subsequent rises in price. Markets have already started to factor in a base rate rise to as much as 6% for next year from the current level of 2.25%. Because of how chaotic market conditions currently are, mortgage companies have had no other choice but to suspend or alter their offerings considerably in response
