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The housing market was dealt a further blow this week after the Bank of Ireland announced it was dramatically scaling back its UK mortgage operation and ditching the 158-year-old Bristol & West brand.
However, the Dublin-based bank says the 300,000 UK homeowners with a current Bristol & West mortgage will see no immediate change, though it looks as though they will not be offered a replacement deal when their current one expires.
Bank of Ireland pulled the six remaining mortgage products from Bristol & West's line-up. It also announced that its mortgages will no longer be offered either directly to UK homebuyers or via mortgage brokers.
Bristol & West, which was one of the first of the big lenders to offer loans for buy-to-let investors, says it will continue to offer UK home loans through its partnership with the Post Office - but on a dramatically reduced scale.
A Bank of Ireland spokesman says the move is in line with the company's aim to reduce its exposure to the UK's dwindling housing market. "The measures announced today are in keeping with the plans outlined in our interim results last November. The Bristol & West brand will slowly disappear over the next few years."
The bank appears to be planning to run down its mortgage loan book, and some Bristol & West mortgage customers may find they struggle to get a cheaply priced replacement deal.
David Hollingworth, of Bath-based mortgage broker London & Country, describes the news as another blow to the UK housing market. "It's more grim news, and the end of a brand that's been around for years. In fairness, Bristol & West hasn't been doing a lot of new loan business through us since the start of 2008, but it is still a further blow to the sector. The company was quite a big player when buy-to-let took off, and it will continue to offer mortgages through the Post Office, though, given what it has said about its financial position, it doesn't look as though it is going to be at the top of the best-buy tables," he says.
Bristol & West was a building society until 1997 when it was bought by the Bank of Ireland for £600m. In 2005, Bristol & West sold its savings and investment business to Britannia building society.
More recently, Bristol & West started supplying mortgages for the Post Office in the UK. This joint venture carries on as before, though in future it will be under the Bank of Ireland brand.
· Lower interest rates look set to boost the equity release market as pensioners increasingly turn to their homes to fund their retirement, new research indicates. Nine out of 10 equity release providers expect the volume of new business to increase during the coming year, according to trade body Safe Home Income Plans.
Interest rate reductions on equity release plans are expected to be a key driver of this growth.
Sharp falls in the returns paid on savings accounts will also have an impact, it is claimed. But continuing house price falls are likely to be one of the biggest challenges facing the market.
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