Almost 1,000 mortgage packages were pulled overnight from the British market as lenders panicked over announcements made in Kwasi Kwarteng’s mini-budget.
Moneyfacts, which monitors the sector, said 935 out of 3,596 mortgage products had disappeared between Tuesday and Wednesday, double the previous record of 462 at the start of the pandemic lockdowns.
Also dragging down the FTSE 100 on Thursday were stocks linked to the property sector.
With the news full of stories about the prospect of rising interest rates and mortgage deals being pulled, it’s understandable that some investors want to cut their exposure to anything linked with the sector, for fear that we could see a sharp slump in the property market. That might explain why housebuilders Barratt Developments and Taylor Wimpey, and property portal Rightmove were down in the dumps on the market.
AJ Bell’s Russ Mould said: “Many investors want to see the Government do a U-turn on a plan to cut taxes and increase borrowing, hoping that would help stabilise markets and be the better option for the country. Yet there is no sign of that happening.
“The main priority is bringing inflation under control yet the Government’s actions in its mini-Budget serve to make inflation even worse, given they’ve sent the pound tumbling. That will make it even more expensive to buy goods and services from abroad, leading to the prospect of even greater interest rates hikes in the future. Liz Truss implies that painful decisions need to be taken, but for many people the current situation is a catastrophe already.”