Access to the mortgage market has been increasing in recent months, according to the Council of Mortgage Lenders.
A note published by the CML stated the introduction of government measures like the Help to Buy mortgage guarantee scheme had helped widen access, citing Bank of England data which showed that over the year to November 2015, the weighted average 10-year fixed rate loan at 75 per cent loan to-value had declined by 70 basis points to 3.34 per cent.
Over the same period, the Bank of England recorded lower rates for almost all types of loans, with a two-year fixed rate mortgage 27 basis points lower at 1.9 per cent.
Bernard Clarke, a CML spokesman, stated the latest credit conditions survey showed the availability of secured credit to households increased again in the final quarter of 2015.
“In the two preceding quarters, credit availability had grown even more strongly, with conditions improving more noticeably for those borrowing at higher LTV.
“Conditions look set to remain favourable for borrowers in the weeks ahead. Firms predicted strong availability of secured credit in the first quarter of this year, and a strengthening appetite for risk over the same period.”
Despite this, he noted that credit quality remained good, with the Bank of England reporting that both default rates and losses, given default on mortgages, had fallen significantly in the final quarter.
The CML also cited a survey by Moneyfacts, which showed the largest reductions in advertised rates had been for borrowers seeking higher loan-to-value mortgages.
In the 12 months to January 2016, average rates fell across the board with the largest reductions – of almost 80 basis points over the year – on 90 per cent LTV mortgages.
| January 2015 | January 2016 | Size of reduction | |
| Average two-year at 60% LTV | 2.07% | 1.99% | 0.08% |
| Average two-year at 75% LTV | 2.85% | 2.16% | 0.69% |
| Average two-year at 90% LTV | 3.84% | 3.06% | 0.78% |
| Average five-year at 60% LTV | 2.97% | 2.66% | 0.31% |
| Average five-year at 75% LTV | 3.25% | 2.94% | 0.31% |
| Average five-year at 90% LTV | 4.56% | 3.79% | 0.77% |
A spokesman for Moneyfacts said many fixed rates were at “never-before-seen levels”, adding that while those with a bigger deposit are still able to secure the lowest rates, those lower down the housing ladder have been able to see truly dramatic reductions.
