Mortgage market stages gradual recovery
The UK mortgage market is showing signs of recovery with the number of products increasing slowly.
However, only borrowers with a minimum deposit of 25% are likely to feel any real benefit, according to Moneyfacts.co.uk.
Research from the financial website shows that since the beginning of April, the number of deals on the market has increased from 1,209 to 1,329.
While evidence of improvement, the figure compares with almost 12,000 home loans available in July 2007.
In addition, today’s market “remains dominated by deals for those borrowers with at least a 25% deposit as lenders look to cherry pick the best customers”, Moneyfacts says.
Borrowers seeking a 90% loan-to-value mortgage now have 106 products to choose from but Moneyfacts spokeswoman, Michelle Slade points out: “The best deal on offer for a borrower with just a 10% deposit is 2% higher than that available to those with a 40% deposit, adding £170 per month to the cost of a £150,000 mortgage.”
She concludes: “The lack of any real competition in the market is still having a huge impact. None of the big lenders seem to want to be the first to cut rates as they are worried they will be swamped with applications.”