Sharp fall in mortgage product availability as market starts to tighten
There’s been a marked reduction in mortgage product availability for a second consecutive month, according to Moneyfacts.
Independent mortgage market monitor Moneyfacts says there are 518 fewer products for borrowers to choose from now than there were at the start of February, which is the largest monthly fall in choice since May 2020 (during the early stages of the pandemic.
Following the two recent base rate rises, the average two-year tracker rate for all loan-to-values rose by 0.33 per cent month-on-month to 2.03 per cent.
This is an increase of 0.45 per cent since December 2021 – outpacing the 0.40 per cent overall increase the Bank of England base rate has experienced over the same period.
The average Standard Variable Rate (SVR) increased by 0.15 per cent to 4.61 per cent this month, the largest single monthly rise on Moneyfacts records, with many providers not yet having amended theirs following the first back-to-back base rate rises since June 2004.
Overall average two- and five-year fixed rates for all LTVs have increased for the fifth consecutive month, rising by 0.21 per cent and 0.17 per cent respectively.
Eleanor Williams of Moneyfacts says:
“Borrowers contemplating securing a new mortgage deal may be disheartened to see that rates are continuing to rise this month.
“The level of product choice took a nose-dive this month, reducing by 518 deals to leave 4,838 deals for borrowers to choose from.
“This is the biggest monthly drop in mortgage availability since May 2020 during the mass product withdrawals recorded in the early stages of the pandemic and leaves borrowers with 384 products fewer than were on offer in March 2020.
“As well as selected product withdrawals, we have seen providers revamp their product ranges with a number pulling whole LTV brackets and in one case temporarily withdrawing their entire range.
“Processing almost double the number of product updates from lenders this month as in February, this has seen mortgage product shelf-life plummet by 14 days, from 42 to just 28, giving prospective mortgage customers just a short period to secure their chosen deal.
“This may indicate lenders are focusing their offerings by adapting their range to keep up with the fluid changes and borrower demand.
“While factors beyond lenders’ control are uncertain, as the cost of living crisis continues and economic conditions are volatile, to mitigate the risk of default, it could be that providers may tighten their lending belts even further moving forwards.”
Kindly shared by Estate Agent Today
Main photo courtesy of Pixabay
