Consumers’ choice of mortgages reaches 5-year high

The number of mortgage products available last month exceeded 10,000 for the first time in almost five years (since September 2008).

July’s average of 10,262 meant that consumers’ product choice has improved 33% in the last year, 97% in the last three years and a staggering 198% since July 2009.

Brian Murphy, head of lending at Mortgage Advice Bureau, said: “One year down the line there can be no doubt the FLS has made great progress towards its goal of lowering mortgage pricing.

“It also seems this has been achieved without compromising affordability. Despite a surge of interest in the market, lenders are keeping a clear head and holding their position when assessing borrowers’ needs against their available finances.

“The benefit of increased competition is that there is a better chance of finding a lender or product to suit more individuals.

“The avalanche of deals descending in the last year has left many people searching high and low to uncover the best deal. It’s no surprise that the latest CML figures show greater numbers are turning to brokers for advice and guidance.

“Even before the upcoming mortgage guarantees arrive on the shelf, credit availability is easing and there is no shortage of choice or funding in the market. With many lenders keen to increase their business, the stream of product launches and special offers shows no sign of drying up.”

Using data from more than 500 brokers and 800 estate agents, the National Mortgage Index also shows that the average purchase mortgage rose for a fifth successive month.

The typical homebuyer borrowed £159,391 in July, up by 6% since the start of the year. In comparison the typical homebuyer salary has grown at just half this rate since January, with a 3% increase bringing July’s average to £40,792.

This has meant the average loan to income ratio has crept up slightly, but is little changed from July 2012. It suggests that brokers and lenders are keeping the emphasis on affordability and responsible borrowing despite growing consumer appetite for buying residential property.