The Intermediary Mortgage Lenders Association (IMLA) and The Association of Mortgage Intermediaries (AMI) have jointly released a statement in response to brokers expressing their vexation regarding abrupt withdrawals of mortgage products by certain lenders.

Over the past two weeks, several lenders have chosen to withdraw their products for repricing due to unexpectedly high inflation figures earlier this month. Consequently, expectations regarding interest rates have risen, with the Bank of England scheduled to make its next decision on June 22nd.

While some lenders have been commended for their handling of the situation, others have faced criticism from brokers. In fact, a group has advocated for a mandatory 24-hour notice period before products are withdrawn from the market. In a current LinkedIn poll conducted by The Intermediary, a staggering 91% of respondents have expressed support for implementing such a notice period.

Kate Davies, the executive director at IMLA, acknowledged the frustration experienced by brokers and their clients due to these withdrawals. However, she raised doubts about the feasibility of implementing a uniform rule for notice periods, emphasizing the need to consider individual circumstances.

Davies stated, "There is currently much comment in the press about the number of mortgage products being withdrawn from the market, often at very short notice. This is frustrating for brokers, customers, and lenders, but decisions to withdraw products and re-price are taken only when absolutely necessary. The root cause is the current volatility in the swaps market, combined with the continuing speculation about further rises in Bank of England base rate."

Continuing her remarks, Davies added, "In practice, we do not think there could ever be a 'one size fits all' approach to giving notice of the withdrawal of a particular product. This is due to different lender funding strategies, which will drive the need for some lenders to move very quickly in order to remain prudent and profitable when there are large and sudden increases to funding costs. IMLA members do take this issue very seriously and will continue to do their best to give brokers as much notice as is reasonably possible when a product is about to be withdrawn. We all look forward to a less bumpy outlook when interest rates and markets settle down."

Robert Sinclair, the chief executive at AMI, acknowledged that brokers understand the challenges currently faced by lenders. Nevertheless, he proposed that lenders adhere to certain guidelines to assist brokers when it comes to product withdrawals.

Sinclair explained, "AMI acknowledges the volatile market conditions and the need for lenders to protect their pipelines, margins, and profitability. However, sudden product withdrawals could be seen as indicative of insufficient pipeline monitoring. We recognize that a mandatory minimum notice period might be difficult for many, but we ask lenders to think about their broker partners and their current and potential customers by providing as much notice as possible. It would be preferable if withdrawal periods could be measured in hours and not minutes, with careful consideration given to the timing of cut-offs, avoiding weekends or late hours. It would be helpful if lenders could commit to try to give 24 hours' notice, with both announcement and deadline falling between 9-5 Monday to Friday. That would be of great benefit to all."

Sinclair concluded by stating that AMI will collaborate with IMLA to establish industry guidelines and best practices that all firms can support in addressing this matter.