Building Societies offer the best buys

Nia Williams

February 24, 2010

Evaluate Technologies analysed best-buy deals at 60%, 75%, 80%, 85% and 90% loan to value (LTV) for the number offered by banks and building societies. In total 24 out of the 50 most competitive deals across all products on offer were from building societies.

Building societies were particularly competitive between 75% and 90% LTV, where they account for 60% of all products. The banks continue to dominate the 60% LTV market with tracker deals.

However on higher LTV deals mutual lenders offer good value – at 85% LTV for example, eight out ten best-buy deals come from building societies.

The fact building societies account for such a significant percentage of all best-buy deals is perhaps a surprise given the Council of Mortgage Lenders report outlining the need to extend the Special Liquidity and Credit Guarantee Schemes to mutuals who are anticipating funding shortages.

Yorkshire and Leek United Building societies were the most prominent lenders, each offering four best-buy deals equal to 8% of the market as a whole or 16% collectively. Nationwide, Skipton, Monmouthshire and Barnsley all had two best-buy products feature.

Jim Barrowman, National Accounts Director at Evaluate Technologies said: “While many mutual lenders are forecasting a shortage of mortgage products if the sector is not supported, this is yet to happen. Building societies have made a play to capture business where the banks are less competitive on loan to values of 75% upwards.

“Banks dominate in the safer 60% LTV market where borrowers are less risky but building societies are willing to offer support at higher rates to borrowers with smaller deposits.”

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