Small Building Societies Stop Lending

The Bath and Earl Shilton building societies have withdrawn their entire range of mortgage products, with the exception of those at their standard variable rates.

Three others, Newbury, Melton Mowbray and the Tipton and Coseley, are lending to local applicants only.

Bath building society chief executive Dick Jenkins has explained how his company became overwhelmed by demand after larger lenders found funds hard to come by:

‘We want to preserve the level and quality of service we offer our customers and we simply can't do that if we have far too many applications to process.’

Tipton and Coseley, who still offer 95% mortgages, have experienced similar difficulties, with applicants nationwide clambering for the best deals.

Tipton spokesman Chris Martin had the following to say:

‘Lenders are withdrawing rates and limiting the percentage they will lend on. We were getting a lot of calls from around the country and we wanted to make sure that people locally can get them.’

He added that Tipton were loathed to take these measures but had very little alternative.

Chris Eagle, Commercial Manager at Credit Choices, feels that the window of opportunity for borrowers to attain mortgage deals at pre-crunch rates has finally closed:

‘These moves signal the end of choice for borrowers. The balance of power has shifted in favour of the lender, with most now offering flat, uncompetitive mortgage deals only to those who meet the strict criteria. All in all, Easter 2008 has been a challenging period for mortgage applicants.’

Related Articles:

Worried Homeowners Seeking Debt Advice

Mortgage Squeeze Takes Hold

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