"Lenders’ margins have inevitably tightened as they have continued to compete on rate to bring in business."
However lenders predict that the availability of secured credit will decrease over the next three months.
Lenders reported that demand from borrowers fell in Q4 and is expected to decrease in Q1 2020. Demand for secured lending for remortgaging increased in Q4, but was expected to decrease in Q1.
Mark Harris, chief executive of mortgage broker SPF Private Clients, commented: "It is no surprise that mortgages were more readily available in the final quarter of last year. Lenders had one eye on year-end targets and you would traditionally expect to see a push for business at this time. With transaction levels subdued as would-be buyers and sellers prevaricated over making decisions with Brexit looming large in the background, the need to do more lending was ever more apparent.
"Lenders reported that demand from borrowers fell in the final quarter, a trend expected to continue into this quarter. This may be to do with the uncertainty that continues around the Brexit negotiations but on the ground we’ve seen more positivity since the general election. Demand for remortgaging increased in the final quarter with borrowers taking advantage of cheap five-year fixed-rate mortgages in particular as a hedge against all the uncertainty.
"Lenders’ margins have inevitably tightened as they have continued to compete on rate to bring in business. This trend is expected to continue into this quarter, which is great news for borrowers. Barclays, Halifax and Skipton building society have already reduced rates this year, a trend likely to be followed by other lenders.
"Thankfully, default rates dropped a little and are expected to continue to do so. This is likely to be down to cheap interest rates and forbearance shown by lenders. Tougher affordability criteria also mean borrowers are less likely to overstretch themselves in the first place when taking out a mortgage."
