Banks suspend mortgages for new customers amid economic turmoil

Halifax, the UKs largest mortgage provider, suspended all mortgage products for new customers yesterday, with a spokesperson stating: "As a result of significant changes in the cost of funding, we’re making some changes to our product range." Halifax’s decision affects all mortgage products for which a fee is required.

Virgin Money also withdrew products at 7PM GMT last night. Skipton have done the same, with both providers making it clear that this will only effect new customers and submitted applications will still be processed.

Following the Government’s Mini-Budget that revealed that the UK will rely on higher levels of borrowing, the pound dropped sharply. A higher level of borrowing means a higher cost for mortgage lenders on offering new deals to customers, leading to mortgage providers suspending their services.

This comes as the Bank of England said on Monday that it would “not hesitate” to raise interest rates after the pound hit record lows.

The Bank of England will meet again on 3 November to determine whether to raise interest rates again, with all signs pointing towards additional hikes.

Many other mortgage providers have also suspended their services, Scottish Building Society and Darlington have withdrawn fixed-rate mortgages. While Bank of Ireland, Paragon and Clydesdale Bank have withdrawn fixed mortgages for new customers.