The overall mortgage product choice has risen to the highest level of availability in over 15 years.
In a report, titled Moneyfacts UK Mortgage Trends Treasury Report, it found that product choice had risen month-on-month for a fourth consecutive month to 5,678 options.
This represents the highest level of availability since March 2008 when there were 6,192 products available.
There is “thriving choice” for mortgage borrowers with small deposits, with the number of 95 per cent loan-to-value deals reaching 254.
This represents the highest point since September 2022 when there were 274 deals.
The number of options at 90 per cent LTV were also found to have risen month-on-month and currently sits at its highest count since February 2022 at 709.
Rachel Springall, finance expert at Moneyfacts, said: “The growing choice of mortgage options demonstrates a buoyant period for the market as the year end edges closer.
“Borrowers with a limited deposit or equity of just 5 per cent may be pleased to find more choice of deals in this sector.”
Industry reaction
Speaking on the research, Imogen Sporle, head of Finanze property, said: “I think it's fantastic that there are so many options for people to buy with small deposits.
“It's been hard to get on the property ladder for years now and for many, this is their only option to buy.”
A similar positivity was shown by Mortgageshop.com financial adviser, Gary Bush, who said: “The increased level of higher Loan to Value products is good to see”.
However, Bush cautioned that, if this is to really help the UK First Time Buyers, some more effects of the current mortgage rate war between lenders need to be seen at this level of borrowing.
“In our opinion, these high LTV products need to see more competitive rates to make a real difference from struggling new homebuyers,” he added.
Malcolm Davidson, director at UK Moneyman director, said: “I think we can take the availability of high loan-to-value mortgage products for granted sometimes.
“There have been lots of periods in the past when this hasn't been the case, most recently during the first lockdown.”
Mortgage product shelf life
Additionally, the research also discovered that the average shelf-life of a mortgage product rose to 20 days, which is its highest level since June this year when it was 22 days.
This has now increased for four consecutive months from a low of 12 days in July, which was the shortest average shelf-life on Moneyfacts’s records.
“Reduced volatility in the market from lenders during October was prevalent, with the average shelf-life of deals rising to 20 days on average, up from 16 days a month previously,” Springall stated.
“These are promising signs that the market is settling and could result in more time for borrowers to take advantage of new offers.
“However, there is no telling how long this may last, as there are growing expectations for fixed rates to fall further, and this could impact the shelf-life of competitively priced deals.
“Lenders will need to carefully balance their pricing and consider any end-of-year targets they expect to hit.”
Two-year and five-year fixes
Additionally, the overall two-year and five-year fixed rates fell between the start of October and the start of November, to 6.29 per cent and 5.86 per cent respectively.
This represents the lowest point since June of this year.
The average two-year fixed rate stands at 0.43 per cent higher than the average five-year equivalent, a narrower gap than the 0.50 per cent difference last month.
Springall additionally stated that, year-on-year, the market has seen “substantial” recovery when it comes to choice.
However, she acknowledged that there is “still more room for improvement” for those borrowers waiting for fixed rates to fall further before they secure a new deal.
“It is imperative that borrowers approach their lender for support if they are struggling to keep up with repayments and seek independent advice to go through all the options available to them,” she added.
Thanks to the Newspage community for sharing their thoughts with FTAdviser.
tom.dunstan@ft.com
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