One of the UK’s largest lenders and a prominent international banking organization, HSBC, made a surprising decision yesterday to withdraw certain UK mortgage products. The purpose behind this move is to reprice them more in line with the UK market, according to our sources.
While it appears to be an isolated action by HSBC at this stage, it has undoubtedly caused concern among borrowers and industry professionals, who are now wondering if other lenders will follow suit. Brokers and intermediaries were informed of the withdrawal of current lending products at 1 pm yesterday, suggesting that there may have been an imbalance in lending and borrowing margins leading to this decision by the bank. However, there has been no official confirmation as yet.
With the next Bank of England review of the UK interest base rate scheduled for 22nd June, borrowers may understandably feel apprehensive about this move. However, indicators from the US suggest that the Federal Reserve is unlikely to raise interest rates further in June. This potential outcome would be welcome news for the UK, as the country often observes trends set by the Fed in line with other economies.
Another point to consider is that most other UK lenders promptly adjusted their rates in response to the rate rise in May, while HSBC did not follow suit across all products.
While this could potentially be an isolated decision by HSBC, only time will reveal the full implications on the mortgage market. We will continue to monitor the situation and provide updates as it develops.