Mortgage nightmare worsens as Santander pulls all home loans and rivals also hike costs

THE mortgage nightmare went from bad to worse today after Santander became the latest bank to pull all its home loans as rivals also hiked costs.

Just days after HSBC pulled its mortgages, Santander said today that it would stop accepting new mortgage applicants for two days.

4

4

Experts said that the unusual move of big banks turning away business showed how much stress was in the market.

Lenders want to make money on their mortgage products and higher interest rates makes it harder to price them.

Banks use government bonds to set borowing costs.

Today, two-year bonds had shot even higher to 4.6 per cent.

As a result, mortgage rates are now close to the 6 per cent that they were during the market meltdown of last autumn’s mini-budget.

The average rate on a two-year fixed mortgage has crept higher to 5.86 per cent, compared to 5.26 per cent last month, according to Moneyfacts.

Lewis Shaw, mortgage broker at Riverside Mortgages, said “something has clearly spooked the money markets”.

Natwest has also hiked the rates of its buy-to-let mortgage deals from 5.22 per cent to 6.79 per cent.

Mortgage rates are rising because the market is predicting that the Bank of England will have to raise the base rate to 5.5 per cent to tackle inflation.

Buyers who took out a two year mortgage in 2021, will face a £5,000 jump in mortgage costs.

The Bank said that the pain of its interest rate rises is still to be felt as two-thirds of homeowners are yet to renew their mortages.

ASHLEY’S ‘LET’S GO’ IN AO BUY

THREE of the City’s most controversial characters have been bizarrely entwined after Mike Ashley’s Frasers Group bought Crispin Odey’s stake in AO World, the online electrical retailer set up by John Roberts.

Both Mr Ashley and Mr Roberts have built a reputation for being entrepreneurs with little patience for typical governance.

4

After taking their companies public, Mr Ashley famously accused City investors of being “cry babies”, while Mr Roberts said “who gives a s***” about missing financial targets by £1million.

The 19 per cent stake purchase of AO World’s shares — billed as a “strategic partnership” between the two retailers — was unveiled late on Friday night.

Only afterwards was it confirmed Mr Ashley had bought Mr Odey’s stake. Shares in AO World rose by 6.5 per cent today.

Adding to the intrigue of Frasers Group now having interests spanning Agent Provocateur, Sports Direct, Sofa.com and AO’s fridges and freezers, Odey’s Asset Management is the second biggest shareholder in Frasers Group with 6 per cent.

While Mr Ashley has handed the chief executive title to his son-in-law, Michael Murry, he remains controlling shareholder with 70 per cent.

Mr Odey was ousted from his hedge fund namesake at the weekend after fresh sexual assault claims by 13 women were uncovered.

Banks are cutting ties with the fund but, as yet, Odey has not stopped investors withdrawing money.

PARCEL JOBS CUT

MORE than 2,000 workers are to lose their jobs after one of the UK’s biggest delivery companies went bust.

Sheffield-based business Tuffnells serves 4,000 firms from 33 warehouses across the country, meaning its breakdown could result in chaos and delays for many customers’ orders.

Interpath administrators have been hired, after the business, which had been hit by rising costs after Covid, failed to secure new funding.

Rick Harrison, of Interpath, said the news was understandably “devastating”.

VEGAN? VE-GONE

CASH-strapped shoppers rejecting pricey meat and dairy alternatives have led Meatless Farm to sack its entire workforce.

The vegan brand, which was selling £11million worth of meat-free products at its peak in 2021, is on the brink of administration.

It dropped its 50-strong workforce on Friday.

The firm had raised as much as £40million from investors looking to cash in on the plant grocery boom.

It follows even bigger vegan brands, including Oatly and Heck, trimming their ranges.

AIR CON STRAIN ON GRID

FIRST it was too cold, now it’s too hot for ­National Grid.

The heatwave and surge in air conditioning use prompted the Grid to warm up a back-up coal-fired power station today to cope with the extra energy needs.

4

Last year, the Grid paid £420m to coal power operators to warm-up when energy supplies were tight.

Octopus Energy has claimed in a White Paper, seen by The Sun, that this bill could be removed if energy-saving schemes were rolled out to all smart meter users.

In a winter pilot, the Grid paid households £11m to cut energy use when supplies were stretched.

This post first appeared on thesun.co.uk