Restricted lending from smaller building societies

Restrictions on lending have been put into place by many smaller building societies, who have found that difficulties in obtaining funds on the wholesale markets have made it impossible for them to meet the demand for loans and finance. As a result these smaller lenders have had to make a number of cutbacks.

An official from one smaller building society recently stated: “Wholesale money is difficult to get and we have come to a standstill at the moment. We are hoping it will just be for a month, but we have taken on so much we have just run out of money to lend at the moment.”

Another said that they had to restrict lending to local consumers due to lack of funding, stating: “We were getting a lot of calls from around the country and we wanted to make sure that people locally can get them. Lenders are withdrawing rates and increasing them and limiting the percentage they will lend on. We are a bit loathe to do that and it is to make sure we don’t have to that we are restricting borrowing to people in our area.”

Over recent weeks a number of smaller lenders have withdrawn some of their deals from the market, leaving just their more expensive mortgages on offer, as well as restricting new lending and being more stringent about who they will lend to.