Mortgage Market Bounces Back
According to Moneyfacts, mortgage lending is back to 75% of pre-pandemic levels following a rise for the seventh consecutive month in May.
Lending is fast approaching the pre-pandemic levels with 3,927 mortgage products on the market compared to 5,222 in March 2020. Within the last few weeks, HSBC revealed that it had secured mortgage borrowers in March than in any other month during its 40-year history.
Across all loan-to-value mortgage brackets, the average two-year fixed rate fell slightly to 2.57% with the average five-year fixed rate increasing slightly to 2.79%. Mortgage deals are saying on the market for longer. In April products were on the market for 32 days, rising from 29, which means that borrowers have more time to secure the right mortgage and get everything in order, which can be difficult in today’s market.
With the reintroduction of 95% and 90% mortgages to the market following the Mortgage Guarantee Scheme (which promoted lenders to introduce high LTV mortgages independently as well as through the scheme) buyers with just a small deposit were again able to start searching for a property after the widespread withdrawal of these mortgages in March. The availability of these mortgage products coupled with cheap borrowing has helped to fuel the current property market boom.
Recent data from the Bank of England has shown that net mortgage borrowing in March 2021 reached the highest level recorded, exceeding the previous pre-financial crash high in 2006.
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