The number of mortgage products available reached a post-recession high in April, according to research by the National Mortgage Index from Mortgage Advice Bureau.
Over a year since the introduction of the Mortgage Market Review (MMR), total mortgage products have increased by 19% (2,123) from 11,416 to 13,539. This is the highest number of available products on the market since the recession hit in 2008.
Despite many believing MMR would restrict consumer choice, the above figures would suggest otherwise. In particular, mortgage products available through intermediaries have grown substantially over the past year, rising from 7,942 in April 2014 to 9,309 in April 2015.
Direct-only products, on the other hand, have gone up by only 756 in the same period (from 3,474 to 4,230). This comes as lenders increasingly make their products available through mortgage brokers.
While average mortgage rates have dropped steadily over the past six months, the premium on five year fixed rates has risen significantly.
Although industry analysts predicted that the uncertainty over the general election would cause a temporary slowdown in the mortgage market – as nervous buyers adopted a ‘wait and see approach’ – the effect wasn’t quite as drastic as some anticipated. There was a slight reduction in mortgage applications in April, but this has been partly attributed to the Easter break at the start of the month as well as the pre-election nerves. Plus, total mortgage applications in April 2015 remained 22% higher year-on-year.
The monthly fall in applications between March and April mostly took place in the struggling remortgage market, where remortgage applications fell by 17%.
“It was widely believed that the general election would put a dampener on the housing market: however, this has turned out to be more of a damp squib,” Brian Murphy, head of lending at Mortgage Advice Bureau, said.
“Industry forecasts for future growth are moderate but positive. Consumer demand is certainly riding high, but our major concern is that housing supply is running dangerously low. The UK is short of enough suitable properties to support potential buyers’ homeowning aspirations, and a housing strategy that will last beyond the current government is desperately needed.”