Mortgage availability to get even tighter

According to some industry officials the availability of mortgages is set to get even tighter, as credit conditions become even more difficult and mortgage product numbers continue to dwindle. Officials have said that there are fewer and fewer mortgages on the market now, and with mortgage numbers having fallen by around 80 percent in the last year things could get very difficult for applicants.

As well as the number of mortgage products on the market falling rapidly there has also been an increase in the number of mortgage lenders demanding higher deposits from buyers, such as 25 or 40 percent or more. In fact, there are now just two lenders that offer 95 percent mortgages, which were once the norm and offered by practically every mortgage lender.

One industry official stated: “The number of deals available for those with a deposit of 25% or more continues to increase as the lenders are looking to cherry pick the best customers. Worries over falling house prices and the potential of customers getting into negative equity has caused the number of deals for customers with just a 10% deposit or less to fall to an all-time low.”

Another said: “The spread between the interest rate you pay if you have a small or a big deposit has widened considerably. Someone with a small deposit has to pay a much bigger premium on their interest rate and they are also shut out from some of the most attractive deals, such as tracker deals.”