New mortgages no longer on offer from Egg
June 30, 2008
The Internet lending giant Egg has recently announced that it will no longer be offering new mortgages, which means that the choice for consumers in the UK who are looking for a mortgage will be further cut. The number of mortgage products on offer to UK consumers has already plummeted by two thirds over the past year, and Egg’s withdrawal from the mortgage market means that there will be even fewer mortgage products on offer to those looking for this type of loan.
Egg only had a small share in the UK’s mortgage market, amounting to around one percent, but has stated that it plans to withdraw from providing new mortgages altogether. Instead, it will focus on its other financial products such as credit cards, although existing mortgage customers will not be affected unless they are on special deals that come to an end, in which case they will most likely be directed to alternative lenders.
The lender is owned by financial giant CitiGroup, and officials from Citi have said that the main reason for pulling out of the mortgage market was the effects of the global credit crunch. Officials also confirmed that they would be focussing more on other financial products as a result of pulling out of the mortgage market. Another Citi owned lender, Future Mortgages, also recently stopped offering loans to new borrowers.
The whole of the mortgage industry has been severely affected by the global credit crunch, which has resulted in an increase in stringency amongst lenders as well as a decrease in the number of mortgage products available. However, supermarket giant Asda has recently announced that it may start offering mortgages despite the troubled mortgage sector.
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