Available mortgage products drop by 75 per cent

  • Story by: Sharon Flaherty
  • Magazine: FTAdviser
  • Published Friday , April 18, 2008

The number of mortgage products available in the UK dropped by more than 75 per cent in the last 12 months as a direct result of lenders being more prudent in their business activities.

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The total number of mortgage products available in the UK market in the week beginning 15 April 2008 totalled 6,526, compared with 27,159 in April 2007.

According to the credit crunch weekly monitor at moneysupermarket.com, the number of products available for first-time buyers has also dropped significantly to 3,454 in April 2008, from 16,452 in April 2007.

The number of lenders offering 90 per cent loan-to-value (LTV) mortgages also continued to drop, with another six lenders pulling their offerings in the week of 15 April 2008, leaving only around 50 lenders currently offering the product.

Louise Cummings, head of mortgages at the comparison website said the availability of mortgage products is expected to get even smaller.

"Lenders are likely to keep removing products and are expected to push up their rates of interest as well as arrangement fees and they are likely to get even more choosy about who they lend to looking to ensure customers are tied into other products with them."

The credit crunch monitor also found that the average best two-year fixed rate mortgage product from the main providers increased by 0.20 per cent over the week, with the average best fixed rate available being 5.98 per cent.

The average best three-year fixed rate available is 5.83 per cent, having increased by 0.13 per cent over the week.