Mortgage product numbers have grown for the fifth consecutive month in signs that confidence is returning to the market, analysis by Moneyfacts has found.
There are now 3,532 deals on offer which is the highest since 5,222 products were available in March 2020.
Over the last two months alone 639 products have been added.
Product availability has improved across all loan-to-value LTV tiers, except for 95 per cent LTV where there are still just five deals on offer.
However, last week’s Budget announcement of a new mortgage guarantee scheme brought hope for borrowers with the smallest deposits.
Costs have continued to climb, with the average two-year fixed rate for all LTVs reaching 2.57 per cent, which is the highest level since June 2016.
The equivalent five-year fixed rate reached 2.75 per cent, which is higher than it has been at any time since November 2019.
The average two year fixed at 90 per cent LTV jumped from 2.57 per cent to 3.52 per cent year on year, while the number of deals currently available is less than half the figure on offer in March 2020, at 323 down from 779.
At 75 per cent LTV the cost of average two-year fixed rates has dipped slightly from 2.29 per cent a year ago to 2.27 per cent this month, while product numbers are down from 845 to 716.
The average shelf life for all mortgage deals has fallen to 26 days – the lowest on record since May 2017, leaving borrowers with little time to secure their chosen deal.
Moneyfacts finance expert Eleanor Williams says: “In the last six months product numbers have risen by 1,120.
“Compared to the increase of only 165 over the six months between July 2020 and January 2021, it demonstrates how significant product growth has been and that lenders are returning with confidence.
“Growth in product availability appears to follow demand, as separate data from UK Finance indicated that purchase numbers from the final quarter of 2020 were at a level not seen since 2007 and demand may remain high due to the Budget announcement on borrower support.
“Borrowers with varying levels of equity or deposit may be pleased to note continued improvements in product availability across the LTV tiers, except for 95 per cent LTV where there are still just five specialist deals on offer.
“However, this may soon change with the government-backed mortgage guarantee scheme from April where, up to this point in time, first-time buyers may have felt neglected.
“In 2020 mortgage products for those with small deposits nosedived and saving for a bigger deposit continues to be hampered by rock-bottom savings rates, while demand remains high for the limited number of affordable properties.”
Original Article from Mortgage Strategy 08/03/2021