Residential mortgage products reach decade high

Residential mortgage products reach decade high

The number of residential mortgage products on the market has risen to above 5,000 for the first time since 2008, a recent report showed.

The Moneyfacts UK Mortgage Trends Treasury report showed residential mortgage products increased from 4,791 in June 2018 to 5,035 in July, the largest monthly growth of its kind since November 2014.

According to Moneyfacts the last time product offerings reached this level was March 2008 when 6,192 deals were available on the market.  

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Charlotte Nelson, finance expert at Moneyfacts, said the market had changed significantly since 2008, when 54 per cent of products available were fixed rate compared to 82 per cent now.

Ms Nelson also said the extra products on the market seemed to have little to no effect on average rates, with the average two-year fixed rate remaining unchanged at 2.52 per cent this month.

She added: "This suggests providers are currently trying to compete for mortgage business in other ways besides rate. Instead, they are opting to perhaps offer fee-free deals and products with incentive packages, which have in turn boosted product numbers."

Figures from the Moneyfacts report also showed a boost in fixed rate availability at every loan-to-value (LTV), with the 90 per cent LTV hitting product numbers of 624 - reported to be a record high on the comparison site’s records.

Phillip Lyle, director at The London Mortgage Brokers, said product choice had greatly improved over the past few years.

He said: "Established lenders are offering a good number of products and also some tiered rates, and with challenger banks coming into the market with offerings, the level of choice is better than it has been for a while.

"Rate continues to be one of the main drivers for activity, however we have also seen a degree of flexibility in lending criteria as lenders compete for market share alongside other incentives, such as cashbacks and free valuations on not just re-mortgages, but also for purchases."