HSBC has temporarily withdrawn mortgage deals for new borrowers due to a surge in demand ahead of expected rate rises.
The bank said on Thursday it would remove all its “new business” residential and buy-to-let products, with deals becoming available again on Monday.
HSBC announced it was withdrawing new deals “to ensure that we can stay within our operational capacity and meet our customer service commitments”, making it likely that the bank will raise rates on Monday.
Products and rates for existing customers were still available.
It is the first time that HSBC, which accounts for almost a quarter of the home loans market, has withdrawn from the mortgage market since the aftermath of September’s disastrous mini-budget under Liz Truss’s government.
Mortgage rates have been rising since data last month showed that inflation was not coming down as quickly as expected.
There have been predictions that the Bank of England will raise rates higher than previously forecast from their current 4.5%, set last month, to up to 5.5%.
Nationwide, Britain’s biggest building society, said it will increase some of its fixed mortgage rates for new borrowing from Friday, which it said would ensure they “remain sustainable.”
A Nationwide spokesperson said: “In recent weeks swap rates (which underpin the pricing of fixed-rate mortgages) have continued to rise and lenders across the market have increased rates or withdrawn products.
“We are not immune to this and need to increase our fixed rates to ensure they remain sustainable.”
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Some brokers criticised the change by HSBC with one saying lenders should give notice of a “minimum of 24 hours”.
Katy Eatenton, of Lifetime Wealth, told the BBC that while HSBC did warn that it might withdraw products earlier than planned, many brokers she knew could not get on the bank’s website all afternoon on Thursday and, as a result, were unable to submit any new applications.
Riz Malik, founder and director at R3 Mortgages in Southend-on-Sea, said the move “really underscored the turbulent times we’re currently facing in the mortgage market”.
