More mortgage products available

Mortgage lenders are easing their lending criteria and starting to offer more loans to potential buyers.

A new study by moneysupermarket.com shows that the number of mortgage products in the market has increased by 13 per cent to 2,430, since falling to its lowest level in August.

However, this is nowhere near its peak in January, when mortgage lenders offered up to 3,384 products. Since the start of the year the number mortgages available to homebuyers has fallen by 27 per cent.

For months customers have struggled to secure the financing they needed to purchase a home as loan to value products have tended to be very low. The modest growth in the number of mortgage loans is a sign that lenders are returning to the market, but this is more likely to benefit potential buyers who already have equity or a large deposit.

The market for 95 per cent loan-to-value products has taken the biggest hit, falling from 36 products in January to a current total of 9.

However the most significant growth has been in 85 per cent LTV mortgages, which has grown by over a third since January.

Hannah-Mercedes Skenfield, mortgage manager at moneysupermarket.com said: “The growth in the number of products available at 85 per cent LTV is therefore particularly encouraging.

“Because of the financial crisis lenders became obsessed with equity to the point where affordability became a secondary consideration.”

She said mortgages with higher LTVs were nearly impossible to obtain, which ultimately contributed to “the property market stalemate.”

However, the number of products available at 60 and 75 per cent LTVs have fallen dramatically over the past year and have not recovered after hitting their peak in January.

In spite of the increase in the total number of mortgage products, gross mortgage lending was down 10 per cent in November and experts say the market for lending is unlikely to improve in the coming months.