"Availability increased across all the LTV tiers this month, with the exception of the limited 95% and 100% tiers where there was no change"
There are now 2,404 products available on the market, representing a month-on-month increase of 145, with the strongest growth seen in the 75% and 80% LTV sectors where product numbers have increased by 43 and 49 respectively. However, year-on-year, there is less than half the number of products available to consumers now than were on offer in November 2019.
The average two and five-year fixed rates for all LTVs have increased for the fourth consecutive month, rising by 0.05% and 0.08% respectively. At 2.43%, the average two-year rate is equal to that seen prior to the onset of the pandemic in March, while at 2.70% the five-year rate sits 0.04% lower.
The average shelf life for a mortgage product has fallen by two days this month. At 28 days, this is the lowest seen since August 2018 – which was the last time base rate increased.
Eleanor Williams, finance expert at Moneyfacts, said: “Borrower demand for housing has risen to the highest level recorded since June 2004, as prospective mortgage customers rush to capitalise on the stamp duty holiday deadline, according to a recent report from NAEA Propertymark. Therefore, some positive news for those would-be borrowers comes from our latest data, which shows that at 2,404, the number of available mortgage products has risen for the first month since June 2020, following the re-opening of the property market after the first UK lockdown, when 2,810 deals were on offer.
“It is notable that 63% of the 145 additional products made available this month are offered in the 75% and 80% LTV sectors, where product numbers increased by 43 and 49 respectively. Indeed, availability increased across all the LTV tiers this month, with the exception of the limited 95% and 100% tiers where there was no change, and the smallest fluctuation was seen in the next highest LTV bracket at 90%. This could be indicative of the fact that lenders are focusing their offerings towards traditionally lower-risk borrowers with a larger equity or deposit.
“However, also on the rise this month are the overall average two and five-year fixed rates. This is the fourth consecutive month-on-month increase, and while slightly less dramatic than the large rises seen in recent months, at 2.43% and 2.70% respectively, these rates are now at very similar levels to those seen a year ago. The steepest monthly increase was seen in the 85% LTV tier, which remains the maximum offered by many providers. Here, the average two-year fixed rate jumped up by 0.19% to 3.12%, while the five-year equivalent experienced a similar 0.18% rise to 3.25%. This means that today’s borrowers with a 15% deposit or equity will be facing rates that are 0.65% and 0.45% higher than they would have a year ago and is perhaps reflective of how uncertain and changeable the economic outlook remains.
“Also demonstrating how fluid the mortgage market remains is the fact that the average shelf life for a mortgage product has reduced to 28 days, which is the lowest on Moneyfacts’ records since providers reacted to the Bank of England base rate increasing from 0.50% to 0.75% in August 2018. It is half the average shelf life we recorded of 56 days in February of this year and suggests that borrowers have a limited time to secure their product of choice."
