Whilst in the throes of a health and economic crisis, there are “operational as well as economic implications to work through for the sector” according to Moneyfacts.
In an update following the crisis, Moneyfacts emphasise the impact that is currently being seen across the mortgage market and how there are similarities to the financial crash in 2008.
Following government guidance to postpone many house purchase transactions until social distancing measures ease, many banks and building societies have agreed to extend mortgage offers where completions have been delayed.
This, Moneyfacts claim, has resulted in a number of providers “limiting their ranges for new customers to those products available for remortgage borrowers only”.
In the latest analysis by Moneyfacts, the number of products available has seen a significant drop since 11 March, going from 5,239 to 3,654.
Eleanor Williams, finance expert at Moneyfacts.co.uk, said: “The recent withdrawal of many higher LTV mortgage products and home purchase products is hopefully a temporary measure while lenders reassess risk in this area of the market and work out what it will be possible for them to offer while the current restrictions are in place.
“With so much uncertainty at the moment, providers seem to initially be focusing on the support that their existing customers may need in the coming weeks.
“However, there may still be borrowers sitting on their provider’s standard variable rate (SVR) waiting to see what the impact of these rate cuts will be and by how much their monthly payments will reduce.
“With the difference between the average two-year fixed mortgage rate and average SVR standing at 2.39% today, the benefit of switching to a new deal while rates are low is evident for those eligible, and would protect these customers from interest rate volatility in the future.
“We have to hope now that the mortgage market is able to rebound as quickly as we have seen it contract, once we begin to come out the other side of the COVID-19 crisis.”