Less bad news and some good
There is a typically close relationship of good news and bad at the moment in the mortgage markets since lenders are still demanding high deposits from buyers even though the number of deals is expanding.
More than two-thirds of the 1,485 mortgage deals on offer require the customer to put up a deposit of at least 25%, according to Moneyfacts. This crept up slightly to 68% of home loans on 6 April compared with 66% a month earlier.
Some recent figures have suggested that the moribund housing market may have started to show some signs of life.
The number of mortgage deals on offer has increased slightly from 1,398 to 1,485 over the last month, according to financial information service Moneyfacts.
The number of mortgages available at 90% of the value of a home has dipped, down from 101 at the start of March to 93 on 6 April. Deals with a loan-to-value rate of 85% have risen, up from 237 to 258.
One market insider at
London and Country Mortgages suggested that this might be because lenders were still being cautious about their lending criteria. “The increase in deals with a 15% deposit could be due to lenders reducing the number of, or withdrawing altogether from, deals with a 10% deposit,” he said.
However, he added that some mortgage providers were offering 90% mortgages again through brokers - their primary source of custom.
Interest rates on these mortgages were not as attractive, or falling in the same way, as those with a loan-to-value of 60% or 75%.
The number of deals in this range is also growing, up from 921 at the start of March to 1,016 a month later. These figures come after a recent set of contrasting results from house price surveys. The Nationwide Building Society reported that property prices rose by 0.9% in March compared with the previous month. The following day,
Halifax, now part of the Lloyds Banking Group, said that prices fell by 1.9% during the same period.
Recent surveys from the Royal Institution of Chartered Surveyors (Rics) have shown rising interest from prospective buyers.
There is anecdotal evidence that increasing numbers of potential buyers are “scoping out” the mortgage market to see what deals they can get before making offers on properties.
From the buyers perspective this is mostly good news. The high deposits required pose a barrier to entry to the housing market but the growing number of mortgage deal available and prices that are still low mean that for those who can produce a deposit there are many attractive opportunities. Those without a deposit will have to wait a bit longer, but their time will also come.
