"The residential mortgage market has seen a significant increase in product numbers, rising by 244 in the month, which is the largest monthly increase since November 2014."
The number of products on the market now stands at 5,035, but remains below the 6,192 products on the market in March 2008.
The 90% LTV market saw a significant increase with fixed product numbers reaching 624, the highest on Moneyfacts’ records.
Charlotte Nelson, finance expert at Moneyfacts, said: “The residential mortgage market has seen a significant increase in product numbers, rising by 244 in the month, which is the largest monthly increase since November 2014. This rise has seen the number of deals reach past 5,000 for the first time since March 2008, when the number of deals stood at 6,192.
“However, the market has significantly changed from 2008, with data from the Moneyfacts UK Mortgage Trends Treasury Report showing that back in 2008 just over half (54%) of the products on the market were fixed rate compared to a whopping 82% this month.
“Unusually, the extra products on the market seem to have had little to no effect on average rates, with the average two-year fixed rate remaining unchanged at 2.52% this month. This suggests providers are currently trying to compete for mortgage business in other ways besides rate. Instead, they are opting to perhaps offer fee-free deals and products with incentive packages, which have in turn boosted product numbers.
“Providers had already made a lot of rate adjustments as they geared up for what seemed a certain base rate rise in May. Although the Bank of England did not increase it, providers have chosen to keep their higher rates, opting to be more cautious and wait and see whether an imminent base rate rise is likely.
“While fixed rate availability at every loan-to-value has seen a boost, the 90% LTV has hit a particular milestone with fixed product numbers reaching 624, the highest on Moneyfacts’ records. This is largely because lower LTVs have become increasingly saturated, and as such providers are finding it more difficult to compete in these areas. Lenders are now starting to branch out of their traditional homes and take on different areas of the market, which includes higher LTVs."
Nicola Firth, CEO at Knowledge Bank, commented: “This latest research from Moneyfacts highlights the frequency at which mortgage products are being added to the market. And while having more than 5,000 mortgages to choose from is excellent news for consumers, it is difficult for brokers to keep up with the sheer scale of products on offer, the different criteria related to each product and the changes being made to them every week. Even if someone has been a broker for years it would be impossible to keep 5,000 products in their head, let alone the 60,000 different pieces of criteria that we currently hold on Knowledge Bank.
“Brokers are simply too busy to spend time checking through countless spreadsheets or lender websites for updates, and the more products that come onto the market, the harder it is to for them to make that time. Knowledge Bank is adding more searchable criteria all the time so will soon exceed the 60,000 criteria from more than 100 lenders, enabling brokers to search this information for their clients in seconds.”
