The number of mortgages on the market has risen for the first time since June, including the available products for borrowers with smaller deposits and first-time buyers.
October saw an increase in over 145 mortgage products being added to the market with a total of 2,404 mortgage products available for buyers, according to Moneyfacts.
The largest increase has been for people borrowing 75% and 80% of their home’s value, giving some hope for borrowers with smaller deposits who have been hit by the withdrawal of high loan-to-value (LTV) products available in the wake of the Covid-19 pandemic.
Borrowers with a 10% deposit, also saw an increase in available mortgage products with 56 mortgages now on offer, in comparison to 51 in October. Meanwhile, 35 new mortgage products were launched for those with a 15% deposit, bringing the total to 344 in comparison to October. Despite the increase in available mortgage products in recent months, this is still half of the level seen in November 2019.
With the economic uncertainty created by the first lockdown, caused lenders to review the level of risk they were prepared to take on. However, many lenders have subsequently streamlined their mortgage range and withdrew products for borrowers with small deposits.
In light of these actions, and the recent surge in property demand, combined with a much stronger demand for mortgages, has caused lenders to introduce a more comprehensive product range, including products for borrowers with a small deposit.
The increase in mortgage choice is good news for potential buyers as it follows five consecutive months during which lenders reduced their range.
The growth in the number of mortgages available for people with only small deposits is particularly welcome, as this sector of the market was hardest hit when lenders reviewed their ranges earlier this year.
Meanwhile, start-up lender Generation Home has just launched a new-style mortgage that can be applied for, by a group of up to six friends or family members.
The idea is that groups of friends who want to live together could buy a property together, or family members could assist a first-time buyer in getting on to the property ladder.
While the income of different people named on the mortgage application will be included in the calculation for how much can be borrowed, the ‘booster’, as they are known, has the choice of either contributing to regular repayments, or just being on standby in case they are needed.
Lenders are seeing a surge in demand for mortgages, and with new products being added almost every day, it gives greater availability and choice for buyers with small deposits, including first-time buyers.
If you are a first-time buyer or are looking to move to a new home, we have a wide range of properties for sale. Speak with one of our property experts by calling us on 0116 275 8888.
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