Mortgage market slowly on the up

Nia Williams

December 22, 2009

In January 2009 there were a total of 3,384 mortgage products available; this fell to a low of 2,182 in August, and has since steadily risen to 2,430. The most significant growth has been in 85% Loan to Value (LTV) products, of which have grown by a third since January.

Hannah-Mercedes Skenfield, mortgage manager at, said: “It certainly seems that we could be on the long road to recovery, after four months of sustained growth in the number of mortgage products available. The real barrier to increased mortgage lending over the last couple of years has been on the supply side, as lenders have been extremely reluctant to open their purse strings a little for fear of increasing their book of bad debt. This meant that the market was dominated by rather tepid products with low LTVs.

“The growth in the number of products available at 85% LTV is therefore particularly encouraging. For many consumers the real difficulty in getting on the property ladder is in scraping together a deposit. Because of the financial crisis lenders became obsessed with equity to the point where affordability became a secondary consideration. The result of this was that mortgages at a higher LTV were nearly impossible to obtain, which in turn contributed to the property market stalemate. The growth in higher LTV deals suggests this equity obsession is dying out a little. However, those with very little equity or deposit will remain concerned by the complete collapse of the 95% LTV market, which has fallen by 75%.”

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