(1) They haven't. As Snowy said, the only movement right now is caution and restriction. The whole of LBG have restricted all new lending to 60% LTV and below. I'm not at liberty to say which, but I'd expect two more announce similar measures soon. Barclays mortgage processing is based out of locked-down Mumbai, so have virtually put a 2009 style lending freeze in place.
(2) Far too many reasons to mention, but a few off the top of my head.
a) Capacity. No lender needs more work at the moment. Their staff are struggling to deal with sorting out what is on their plate already. The last thing they want is attractive rates and a deluge of new applications to assess
b) the impact on knock-on areas of the industry. People can't get a valuation done because property surveyors are definitely not essential and nor is traipsing in and out of peoples homes. Thus, things stay blocked.
c) margins. Before this all kicked off, rates were at a historic low. You could get a two year fix at around 1.2% or 5 years at 1.4%. There have been sub-1% fixes rates before, but gimmicky ones where the fees negate any saving made by the internet rate. Even if they do come back, are you actually better off paying 0.99% for two years and a two grand fee compared to paying 1.19% with a £999 fee, which you've been able to do for over a year now. There isn't really capacity in the margin to reduce it by anything that will make a noticeable difference.
Incidentally, while I've been writing this post, Virgin Money have said that they suspending all mortgage lending, apart from remortgaging up to 60%, and nothing more than 300k. This is not a market where lenders are desperate to lend money.