Twenty per cent rise in home loans on offer

The UK’s mortgage market looks set to continue its recovery into 2010, with a 20% rise in the number of home loans available since the beginning of the year.

According to Moneyfacts.co.uk, the surge has led to a 26% increase in deals offering up to 90% loan-to-value and therefore requiring the size of deposit accessible by first-time buyers.

The financial website’s spokesman, Darren Cook, comments: “An improved broker market paired with recent cuts in some rates to direct customers could indicate that lenders are opening their doors just a little wider and trying to compete for business.”

Mr Cook also observes that the remortgage market could see a revival if standard variable rates (SVRs) continue to rise.

Since the onset of the credit crisis, remortgaging activity has been in a steady decline as borrowers coming to the end of fixed-rate deals opted for lenders’ relatively attractive SVRs.

However, recent rises in SVRs, notably in the building society sector, could hot-up competition as home owners coming to the end of their fixes begin scouring the market for attractive deals.

Moneyfacts has also reported that the average cost of a two-year fixed-rate home loan declined from 4.88% at the beginning of January to 4.81% today.

For a five-year fix the typical rate stands at 6%, or 0.09% less than at the beginning of of the year.

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