October ‘marks weakest start to the month for mortgage choice in over a decade’

Credit: PA

October has seen the weakest start to the month for mortgage product choice in more than 12 years, according to a financial information website.

Some 2,258 residential mortgage products were available on Saturday October 1, according to Moneyfacts.co.uk.

This was the lowest figure for the first day of a new month since May 2010 when 2,087 deals were available, it said.

Lenders pulled mortgage products from sale in large quantities last week amid market turmoil following the mini-budget.

On the first day of September this year, there had been 3,890 mortgage products for sale.

Kwasi Kwarteng speaking to the media ahead of the Conservative Party annual conference at the International Convention Centre in Birmingham. Credit: PA

It comes after the chancellor announced his so-called mini budget on September 23 in which he unveiled the "biggest tax cutting event in half a century" spooked the mortgage and financial markets, sending sterling crashing and interest rates soaring.The pound rebounded after Kwasi Kwarteng announced an abrupt U-turn over the abolition of the top rate of income tax for the highest earners, admitting it "was the wrong thing to do".

Mr Kwarteng issued a statement on Monday, climbing down over the plan to axe the 45% rate for earnings over £150,000 and pay for it by borrowing, stating it had become a “distraction” amid widespread criticism and market turmoil.

'Next few weeks will be crucial'

By Monday this week, there had been a slight improvement compared with Saturday, with 2,262 mortgage products to choose from.

Rachel Springall, a finance expert at Moneyfacts.co.uk said: “Borrowers may be concerned to see a further fall in mortgage availability but many lenders have been very vocal that their withdrawals are on a temporary basis amid interest rate uncertainty.

“Seeking advice from an independent broker would be wise, especially for those borrowers who have not yet started the mortgage process and are deterred from the level of choice and much higher mortgage rates than they were perhaps anticipating.

“The next few weeks will be crucial to see where lenders go from here, but we have already seen some new fixed deals arrive since last week.”

Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To Know.