Signs of stability returning to mortgage market as choice of products grows

The choice of mortgages increased for the fourth month in a row in February, in signs that the market is settling down following the shock of the coronavirus crisis.

The number of mortgage deals on the market is at an 11-month high, Moneyfacts.co.uk said.

The average “shelf life” that products are remaining on the market for is now 40 days, up from 28 days for the previous three months, in what Moneyfacts said could be another indication that the market may be settling.

Many deals were pulled early on in the coronavirus crisis, particularly low-deposit products, as concerns grew around rising unemployment and the possibility of house prices decreasing.

In recent months, many lenders have been returning to low deposit mortgage lending, although some have put toughened lending criteria in place.

Moneyfacts found that 3,215 mortgage deals were available in February – marking the highest number since March 2020, when there were 5,222.

Since October 2020, total product choice has increased by 42% – the largest four-month increase Moneyfacts has recorded since 2007.

In some encouraging news for first-time buyers, Moneyfacts said the 10% deposit bracket experienced the biggest monthly increase in mortgage availability in February.

It counted 248 products available in this low-deposit bracket, compared with 160 in January and just 70 deals in July 2020.

Eleanor Williams, a finance expert at Moneyfacts, said: “After three months at a record low of 28 days, the shelf-life for mortgage products has risen to 40 days, giving would-be borrowers a much better chance of securing their chosen deal before it is withdrawn.

“This, coupled with overall average rates remaining quite static and availability continuing to improve, could imply the mortgage market is now the most stable it has been since the onset of the pandemic last year.”