The Intermediary Mortgage Lenders Association (IMLA) and the Association of Mortgage Intermediaries (AMI) have released statements in response to broker concern around the withdrawal of products across the mortgage market.

IMLA described the situation as “frustrating” for brokers while acknowledging there cannot be a “one size fits all” approach, and AMI has called on lenders to think about their broker partners and their customers by giving “as much notice as possible”.

Last week, financial data from Moneyfacts suggested that almost 10% of UK mortgage deals had been taken off the market amid concerns about how high interest rates will go, an estimated 800 products across both the residential and buy-to-let markets.

BBC News also reported yesterday that an average two-year fixed-rate mortgage deal is £35 a month more expensive than a few weeks ago, while Moneyfacts figures also showed the interest charge has gone up by 0.3% since recent data showing inflation not coming down as quickly as expected.

The recent inflation figure from the Office for National Statistics, which has prices still rising by 8.7% in the year to April, has led many industry experts to predict the Bank of England (BoE) will raise rates higher than previously thought, from their current 4.5% to as high as 5.5%.

In response to the recent mortgage market movement, executive director at IMLA, Kate Davies, said: “There is currently much comment in the press about the number of mortgage products being withdrawn from the market, often at very short notice. This is frustrating for brokers, customers and lenders, but decisions to withdraw products and re-price are taken only when absolutely necessary.

“The root cause is the current volatility in the swaps market, combined with the continuing speculation about further rises in BoE base rate.”

She added: “In practice, we do not think there could ever be a “one size fits all” approach to giving notice of the withdrawal of a particular product. This is due to different lender funding strategies, which will drive the need for some lenders to move very quickly in order to remain prudent and profitable when there are large and sudden increases to funding costs.”

Chief executive at the AMI, Robert Sinclair, also said that the group acknowledges the volatile market conditions and the need for lenders to protect their pipelines, margins and profitability.

However, he also stated that sudden product withdrawals could be seen to be “indicative of insufficient pipeline monitoring”.

“We recognise that a mandatory minimum notice period might be difficult for many, but we ask lenders to think about their broker partners and their current and potential customers by giving as much notice as possible,” Sinclair commented.

“It would be preferable if withdrawal periods could be measured in hours and not minutes, with thought given to when cut-offs are announced, not at weekends or late in the day. It would be helpful if lenders could commit to try to give 24 hours’ notice, with both announcement and deadline falling between nine to five, Monday to Friday. That would be of great benefit to all.

“We will continue to work with IMLA to see if we can establish some industry guidelines and best practice that all firms can support.”

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