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Withdrawal of mortgage products to continue?

Journalist: Sally Hickey, Financial Times

ended 19. May 2023

Scottish Building Society has withdrawn its 60% LTV 5-year fixed rate products due to “unprecedented demand”. What do brokers think about this, and will we see other products removed from the market?

SBS's 80% LTV product is still available.

The products being withdrawn are below:

FIX5Y043 - 5 Year Fixed 60% £995 Fee - 4.09%
FIX5Y046 - 5 Year Fixed 60% £0 Fee - 4.29%
FIX5Y049 - 5 Year Fixed 60% £995 Fee - 4.09%

4 responses from the Newspage community

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Justin MoyVerified
Managing Director at EHF Mortgages
By the looks of the mortgages rates being withdrawn, this mortgage lender has been caught with some too-competitive products whilst the rest of the market has moved in the last week or so. Smaller Building Socieities obviously have a limited processing capacity, so this immediate withdrawal would be essential. I don't see any other pricing anomallies in the market so it is unlikely we will see something like this for a while.
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Aaron StruttVerified
Product and Communications Director at Trinity Financial
Five-year fixes priced around the 4% mark are starting to increase so many brokers will be pushing hard to get their clients the cheapest rates.
Since the base rate went up more of the banks and building societies have pushed up the price of their mortgages which is unfortunate because we need them to either stabilise or come down a bit.
Some mortgage lenders seem to be busier than others at the moment with many smaller building societies getting lots of enquiries but fewer applications than usual.
The Scottish Building Society offers some popular but niche products like self-build, guarantor and holiday lets.
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Graham CoxVerified
Director at Bridging Hub
With mortgage rates at 15-year highs, borrowers are more 'price' conscious than ever. So any lender who finds themselves at the top of the product leaderboard tends to get swamped with applications. They then have to withdraw the product to allow their staff to catch up.
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Ross McMillanVerified
Owner/Mortgage Advisor at Blue Fish Mortgage Solutions
As one of the smaller - but perfectly formed - lenders in the market place, Scottish Building Society will and need to always keep a tight rein on funding availability at different tranches of their mortgage book to demonstrate sustainable and sensible lending for their members.

This recent wthdrawal, however abrupt, is just an example of prudent management in my view and another indicative measure of the healthy demand for funding from the general public within the current market.

Products are withdrawn and revised by lenders big and small on an almost daily basis and then typically return in due course or are usurped fairly quickly by other lenders filling any gaps and opportunities that others may have temporarily left. This is not, in my view, cause for or any kind of sign of any deeper alarm.