Number of mortgage deals plummets
Updated on 25 March 2008
The number of different mortgage deals available has dived by nearly two-thirds since the credit crunch first hit last summer, figures show.
There were just 5,725 different deals for borrowers to choose from at the end of last week, down from 15,599 at the beginning of July 2007, according to financial information group Moneyfacts.
Unsurprisingly, the biggest fall in choice has been for people with adverse credit histories, with the number of sub-prime deals available nose-diving by 81% to just 1,798 mortgages, including buy-to-let loans, down from 9,531 in July, as lenders become increasingly risk averse.
But the total number of buy-to-let products has also fallen by 60% since last summer to just 1,444, while there are now only 2,565 different mainstream mortgages, a third less than the 3,803 that were available in July.
The figures came as lenders continued to pull deals from the market on a daily basis, while a commentator warned that it could be three years before the mortgage market returns to normal.
Dunfermline Building Society became the latest player to pull out of the 100% mortgage market. Its move leaves only Abbey still offering the deals without conditions, such as a parent acting as a guarantor, but the rates offered by Abbey are now so high that it is effectively priced out of the market.
The group is offering a two-year tracker rate of 2.99% above base rate, giving a current rate of 8.24%, while it has a two-year fixed rate deal of 7.94%.
A handful of lenders will also offer 100% loans to graduates or as guarantor mortgages, down from more than 40 players in the market in November.
Bristol & West will offer 100% mortgages under its First Start loans, which first-time buyers take out jointly with their parents, but it today hiked its rates on the deals by up to 0.9%.
Standard Life Bank also announced that it was withdrawing all of its two-year tracker and fixed rate mortgages from the close of business on Thursday. It has also stopped lending 95% of a home's value on its three, five and 10 year fixed rate mortgages, instead demanding a deposit of at least 15%, while it is capping the maximum amount it will lend at £500,000.
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