Are Mortgage Deals Declining?

by Mark Johnston

It seems that after a steady climb at the end of last year, mortgage deals on offer have taken a sharp down turn in recent months.

At the start of April, the financial information service,, noted that the past 2 months had definitely seen a sudden drop in the total number of mortgage deals available to all borrowers.

The mortgage market was starting to look healthy at the beginning of 2012, with a peak of 2,757 deals on offer in February. However, March saw just 2,288 mortgage deals offered and this number continues to fall.

Ray Boulger, of mortgage broker John Charcol, suggested that the increase in the number of mortgage deals late last year may have been due to lenders looking for more profitable borrowers.

Although some experts believe that the main reason fro the fluctuation in the number of products on offer may be due to the stamp duty holiday coming to an end in March this year and also the introduction of the governments ‘new buy’ scheme.

Figures from show that nearly two thirds of all deals on offer still require a deposit from the borrower of at least 20% or more of the property’s value.

It therefore seems that a loan to value (LTV) of more than 80% is now becoming a thing of the past and even borrowers with healthy annual incomes and good credit ratings are finding that the range of loan to value (LTV) products is constantly decreasing.

According to other data there are 2,557 mortgage types on offer, but 64% of these require at least a 20% deposit and only 2% require a deposit of 5% or less.

Michelle Slade, of, stated “there are deals for borrowers with a 5% deposit but the majority now require a guarantor to qualify or are from lenders which offer restricted lending”.

Recent research from the Bank of England has also shown that re-mortgage deals have also declined in demand for the second month in a row.

It seems in general that lenders have become even more cautious in their outlook on future borrowing and have pulled most of their cheapest deals.

In March, the Bank of England reported that banks and other lenders were preparing to further restrict their mortgage lending in the coming months.

Among those currently making changes to arts of their mortgage ranges are: Abbey, HSBC, Halifax, Lloyds TSB, Santander, Britannia and Cheltenham & Gloucester.

Many of these lenders have begun to pull back on lending, making restrictions tighter and thus making higher loan to value (LTV) mortgages much tougher to obtain.

The drop in mortgage deals seems to indicate that borrowers are less likely to apply for a mortgage at the current time. This may be due to a difficult mortgage market with larger costs involved in taking out a mortgage.

While these changes are taking place, the mortgage market in the UK looks set to stagnate over the coming year, which in turn will

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