Mortgage availability reaches to highest levels since the onset of the pandemic as lenders entice higher loan-to-value borrowers.
Mortgage product choice reached the highest level since the onset of the pandemic last month as lenders battled for market share.
Lenders introduced 269 new products in June alone, which caps nine months of consecutive increases in mortgage availability, according to data from Moneyfacts. The good news doesn’t stop there either – for the first time since June 2018 product choice increased at all loan-to-values (LTVs), most notably at 95% LTV.
The cost of mortgages is falling too. Average rates at lower LTVs, generally those at 80% LTV and below, have fallen to all time lows and a price war is now emerging at higher LTVs, according to Hina Bhudia, a partner at Knight Frank Finance.
“Most of the big names on the high street have announced cuts to their range, which is fantastic news for borrowers,” Hina adds.
Since the early days of the pandemic, mortgage rates at 85% LTV and above have been notably more expensive than they were at the outset of the crisis, partly due to uncertainty over the outlook for the economy, but also while lenders were overwhelmed with mortgage applications during an unprecedented period of housing market activity.
Lenders have since increased operational capacity and are building market share as the economy improves. In addition, consumers tucked away record amounts of savings over the course of the pandemic, leaving the banks with huge amounts of funds available for lending.
"Lenders, which have huge amounts of capital on their books, are anticipating a drop off in sales as the stamp duty holiday tapers off,” Hina adds. “Boosting activity among high LTV borrowers by dropping rates will enable them to retain market share as normal conditions begin to return to the property market."
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