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Stampede sees pegged-rate loans withdrawn

Lenders are withdrawing fixed-rate deals by the bucketload as many have run out of funds after a surge in demand that followed last week’s shock base rate rise.

At least 17 lenders had withdrawn fixed deals or signalled their intention to do so as Money Marketing went to press, with more set to follow, after a stampede to snap up cheap deals.

Yorkshire Building Society had £60m in applications last weekend compared with £12m a day normally.

This week saw inflation rise from 2.7 per cent in November to 3 per cent in December, leading to predictions of further rate rises.

Alliance & Leicester, Nationwide, Portman, Skipton and Yorkshire have all withdrawn or repriced fixed-rate products.

A&L spokeswoman Sally Lauder says: “We ran out of funds. Swap rates are also very expensive so we will be repricing next week.”

Yorkshire spokesman David Holmes says: “If we had known we would get that volume, we would have pulled the rates last Friday.”

Some commentators think lenders are seeking to increase their profits and stop borrowers getting a cheap rate before February 1, when most tracker and variable rates go up after the quarter-point base rate rise last week from 5 to 5.25 per cent.

Chase de Vere Mortgage Management director Nick Gardner says: “Lenders often use base rate rises as an opportunity to increase their profit margins. It is an easy way to make extra profits.”

Base rate move takes industry by surprise. View the story by Guy Anker.

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