A&L withdraws two-year fix

Alliance & Leicester is withdrawing its two-year fixed-rate mortgage because demand has outstripped supply.

Richard Taylor, head of mortgages at the bank, says: “Over the past few days we have seen a high demand for our 4.99% two-year fixed-rate product and therefore we have taken the decision to remove it from the range.”

According to financial website, MoneyFacts.co.uk, the number of mortgage products available across residential and buy-to-let markets has declined from 7,726 to 5,700 in the past month alone.

However, Firstrung, the fist-time buyer mortgage specialist, believes that this is not necessarily bad news for its customers.

Paul Holmes, operations director of Firstrung, argues that with 60% of mortgage products having disappeared from the market in the past year, house prices will inevitably fall.

He explains: “The cheap and readily available credit has gone so there’s only one place for house prices to go and that’s to fall quite dramatically.”

He sees first-time buyers as not only benefiting from the falling price of existing housing stock but also gaining bargains from housing developers desperate to attract buyers.

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