Number of mortgage products hits five-year high

The number of mortgage products available has reached its highest level for nearly five years, statistics from the Mortgage Advice Bureau have revealed.

The mortgage broker’s national mortgage index, showing that 12,032 products were on the market last month, corresponded with figures separately released by the Council of Mortgage Lenders today, revealing that gross mortgage lending was up 30 per cent year-on-year to £17bn last month.

The addition of 1287 mortgage products since September - and a 6 per cent rise in the amount of products available through brokers - contributed to the record number last month, which was more than three times the total seen in April 2009 (3,867), when MAB started the figures.

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By contrast, the MAB’s data showed a 4 per cent fall in the number of direct-only mortgage products since September.

Brian Murphy, head of lending at the Mortgage Advice Bureau, said brokers have a “vital role” to play in unravelling the varity of options, such the Help to Buy initiative, for first time buyers and anyone with “limited experience” of obtaining a mortgage.

Bob Pannell, chief economist at the CML, expressed muted optimism about the market’s appetite for lending in the next two years, but added that incoming regulatory changes would “hardwire” in a more risk-averse lending environment.

He added: “While we expect lending to rise in line with better economic conditions, the next two years are unlikely to see lending levels getting very far above £200bn a year.”

Mr Pannell pointed out that the November statistics, while higher than the £156bn originally forecast, was “still a far cry” from the £363 billion lent at the height of the housing boom in 2007.

However, the buy-to-let specialist Assetz has cautioned that house prices will only continue to rise, probably by 10 per cent in 2014, as government efforts to address Britain’s undersupply of housing fall short.

Stuart Law, chief executive of Assetz, said: “There is no answer to the problem of undersupply of new homes in the UK. While large housebuilders balance sheets have recovered very nicely, their output has not been able to make a significant dent in the supply deficit.

“Around 350,000 new homes are needed per year to have any impact on property price growth but I doubt this figure will even reach 150,000 housing starts next year.”