Mortgage Choice Hits a New Post-Pandemic High

Posted on by Eden
Mortgage

The number of mortgage products available on the UK market has reached a new post-pandemic high, according to the latest data published by Twenty7Tec more than 800 new mortgage products were introduced in June alone.

This represents a 6.6% growth on the month prior, bringing the total number of mortgage products now available to more than 13,000. This is the highest number recorded since March 2020 prior to the COVID-19 crisis.

Activity from first-time buyers accounted for a reassuring 20% of total market activity in June, suggesting that the withdrawal of the stamp duty incentive has not had a major impact on interest. July 1st saw the partial return of stamp duty obligations return to normal rates, though home buyers purchasing properties valued at £250,000 or less will continue to be exempt until the end of September.

95% LTV mortgages proving popular

The figures published by Twenty7Tec also indicate that the government backed 95% LTV mortgage initiative is proving popular, total search volumes for 5% deposit mortgages accounted for 5.15% of all activity in Q2, up from just 1.37% in Q1.

First-time buyers unable to offer a 10% or 20% deposit can now apply for a 95% LTV loan with several major High Street banks. However, some have commented on the extent to which lenders are scrutinizing the 5% deposit mortgage applicants, making it difficult for those without flawless credit and a very high annual household income to qualify.

Mortgage product availability now at 65%

Commenting on the figures, director at Twenty7Tec Phil Bailey said that while the numbers are reassuring, there is still a long way to go until the market gets back to its pre-pandemic norms.

“The end of June saw a huge final push for closure of documents. It’s quite funny that we bash solicitors constantly for being really slow and inefficient. But it’s amazing how, when there’s a financial, commercial element how quickly they suddenly get stuff through. Lenders, brokers, solicitors, conveyances, the land registry, everyone just upped their game,” he said.

“I think that one big lesson from the past year is that the various parts of the market are, slowly, coming together a little more and understanding about the timeframes in which each works. Being able to predict with more certainty how various parts of the market will react to changes, is critical to the evolving mortgage and housing landscape. Surely data has a big part to play here?”

“We saw a huge rise in the number of products on the market this month, up 804 products. Yet we’re still only at 65% of the previous volumes of products on the market. So, given that all searches and ESIS document volumes are still well up on the highs of last year, every product is having to work harder as demand is outstripping supply.”