Product choice has continued to improve for borrowers, increasing for 10 consecutive months to 4,660 – the highest it has been since March 2020 – according to the latest Moneyfacts UK Mortgage Trends Treasury Report data.
The total number of products was found to be higher now than during the height of the pandemic, and to have recovered to 93% of the level seen in August 2019 (5,009).
The data also revealed that the average shelf life of a mortgage – 21 days – was equal to the lowest Moneyfacts has ever recorded, which was in May 2017, with electronic records running back to 2011.
For the second consecutive month, both the average overall 2-year and 5-year fixed rates fell, now sitting at 2.52% and 2.75% respectively.
Both rates dropped by 0.03%, seeing the average overall 2-year at its lowest level since January 2021, and the average 5-year fixed rate reached its lowest since March 2021.
Eleanor Williams, finance expert at Moneyfacts explained that insight from HMRC has attributed the increase in property transactions over the last four quarters to both the introduction of the stamp duty land tax (SDLT) holiday and ongoing strength in the housing market.
Although the SDLT holiday is beginning to taper towards its end, Williams said there may well be continued momentum in the market as the ‘race for space’ appears to be continuing and lenders could be looking to entice borrowers, who for varying reasons may not have been able to proceed before now.
She added: “Our data shows that the amount of choice available to consumers has risen again this month with 4,660 total products on offer, the highest recorded in 17 months.
“This demonstrates the level of recovery in the residential sector where, for only the second consecutive month since June 2018, availability rose across all the individual loan-to-value (LTV) brackets as lenders endeavour to accommodate borrowers with varying levels of deposit or equity.”
The data also found that availability in the lower and mid-LTV sectors has rebounded, where borrowers looking at 80% or 85% LTV options have 152 and 22 more products to choose from than in August 2019.
As well as this, choice has continued to improve in the higher LTV tiers, with growth at 90% and 95% LTV increasing by a further 25 and 22 deals this past month alone.
Williams said this reflects that, likely supported by the introduction of the Mortgage Guarantee Scheme, providers are prepared to cater to this traditionally higher-risk demographic.
She said: “Further good news is that both the average overall 2- and 5-year fixed rates fell by 0.03% this month.
“The 2-year fixed rate of 2.52% is only 0.03% above where this sat two years ago, while the 5-year equivalent of 2.75% is 0.09% below where it sat August 2019.
“These falls are perhaps fuelled not only by the growing number of lenders launching sub-1% deals predominantly in the lower LTV tiers, but we have also seen rate re-pricing across the higher LTV lending brackets, particularly at 90% LTV where the 2-year fixed average fell by 0.14% and the 5-year by 0.13% this month alone.
“This month has seen the average shelf life for a mortgage product reduce by 9 days to just 21 days, last seen in May 2017 and the joint lowest we have recorded.
“Borrowers considering their mortgage options may therefore find that products have a limited period when they are available, and so having the up-to-date market knowledge of a qualified adviser could be invaluable in ensuring they can secure their chosen product in time.”