Since the times before the credit crunch, back in 2007, not only has the number of mortgage products fallen drastically but the types of mortgages have also changed. You can no longer find the 125 percent mortgages and there were only a quarter of the 95 percent LTV mortgages at the end of 2009. Self certification mortgages too have died a death.
Yet a couple of weeks ago moneysupermarket.com reported a 13 percent rise in the number of mortgage products in the months since August. August was the lowest point in the number of mortgage products at jus 2,182 products – a 40 percent decline from January 2008.
Last month, products had risen to 2,430 – a distinct recovery although still lower than the start of the year, according to Fair Investment.
The 85 percent LTV mortgages have grown by over a third and these have seen the largest rise in 2009 of all mortgage types.
Moneysupermarket.com reported four months of growth towards the end of 2009 so is this the start of the road to recovery?
Moneysupermarket.com’s Mortgage Manager, Hannah-Mercedes Skenfield, said:
“For many consumers the real difficulty in getting on the property ladder is in scraping together a deposit. Because of the financial crisis lenders became obsessed with equity to the point where affordability became a secondary consideration.”
As 85 percent LTV mortgage deals increases, Ms Skenfield believes that obsession may actually be beginning to die somewhat.
Whether or not 2010 will see the number of mortgage products rise to the same levels as pre-credit crunch or see the introduction of a mortgage product to replace the self-certification deal for the self-employed or those with difficult-to-prove mortgages remains to be seen – or will we see the FSA outlaw them officially and the CeMAP syllabus amended to suit?