Mortgage products rise 53% as borrowing hits record levels


The growth in availability was cross-tier, but the most significant rise was at 95 per cent LTV, which increased from 34 deals last month to 112

The number of mortgages has risen for seven months in-a-row to register a 53 per cent rise since last March, as borrowing hit the highest level ever on Bank of England (BoE) records.

With 3,927 products now on offer, net borrowing levels in March were higher than October 2006 at the peak of the pre-financial crash mortgage boom, according to Moneyfacts.

Moneyfacts suggests this shows lender confidence that ‘demand will remain prevalent in the coming months’.

Research showed there are now 78 more deals at 95 per cent loan to value (LTV) and 41 more at 90 per cent LTV in March against the month before, well ahead of the launch of the government guarantee scheme in mid-April.

The data showed growth in availability was cross-tier, but the most significant rise was at 95 per cent LTV, which increased from 34 deals last month to 112. The proportion of the market where deals are available at 80 per cent LTV or above has increased to 49 per cent against 31 per cent this time last year.

After nine months of rising rates, the average two-year fix fell marginally by 0.01 per cent to 2.57 per cent, but the average five-year fix increased by 0.02 per cent to 2.79 per cent.

The average length of time a mortgage is offered to borrowers also rose by three days to 32 offering applicants longer to secure their product.

Eleanor Williams, finance expert at Moneyfacts, said: The sense of optimism in the mortgage sector continues, with product choice continuing its climb back towards pre-pandemic levels.

Housing supply remains an obstacle for would-be buyers, she added, and that this shortfall may well continue to drive up house prices.

Lenders have been vocal about their confidence in the mortgage market as the UK lockdown eases, which is refreshing to see after the turmoil the pandemic created for home movers and those looking to switch their deal for all walks of life, Williams said.

There has been a reduction to the average fee charged (excluding no-fee deals) compared to last month, she added.

Vikki Jefferies, proposition director at Primis Mortgage Network, said: The work of advisers will be a huge asset to lenders who are driving the increase in product availability, particularly amongst those who have been disproportionately impacted by the Covid-19 crisis.

Jefferies said advisers will be especially key in highlighting the variety of solutions that are available to younger borrowers, which will also go a long way towards boosting confidence among this cohort.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Getting Money Wise. The information provided on Getting Money Wise is intended for informational purposes only. Getting Money Wise is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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