PRN: Green Shoots of Recovery for First Time Buyers in the Mortgage Market
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Green Shoots of Recovery for First Time Buyers in the Mortgage Market
CHESTER, England, July 20, 2011 /PRNewswire/ --
First time buyers and borrowers with smaller deposits are enjoying the first signs of recovery in the UK mortgage market, with the number of products available for those with a 10 per cent deposit rising to the highest levels since November 2008, according to analysis by moneysupermarket.com.
There are now 312 mortgage products at 90 per cent loan to value (LTV), an increase of 17 per cent since June. The last time there were was over 300 products available was in November 2008, when Bank of England base rate was at 4.5 per cent and the impact of credit crunch began to have a major impact on mortgage lending.
As well as an increase in the number of mortgage products available, the average rate on 90 per cent mortgages has also begun to fall. The average rate on fixed rate mortgages has dropped 0.53 per cent in the past year to 5.87 per cent this month - and has dropped 0.17 per cent since last month. Although tracker mortgages at 90 per cent LTV are now more expensive than this time last year, the average rate is now 5.5 per cent, a drop of 0.22 per cent since June.
Clare Francis, mortgage spokesperson at moneysupermarket.com, said: "There is a severe shortage of first time buyers at the moment and one of the reasons for this is down to the fact that it's been so difficult to get a mortgage unless you've had a deposit of 25 per cent or more. It's therefore encouraging to see an increase in the number of 90 and 95 per cent mortgages available.
"That said, we are still a long way off the number of products that were available pre-credit crunch and those with smaller deposits are still having to pay a higher rate of interest than those who are able to put down 25 or 30 per cent. It's good to see things are moving in the right direction though as this should make it slightly easier for people to take that first step onto the property ladder."Â
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