Another 1,000 mortgages go on the market as lenders open the floodgates

 
Tim Wallace
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BANKS are offering increasing numbers of mortgage products to compete for new customers as the market finally gets back to operating at normal levels, figures from the Mortgage Advice Bureau showed today.

A total of 12,265 products were on offer last month, a jump of 964 in just one month.

It means more products are on the market now than at any time in the five years since the mortgage brokerage started tracking the market.

The index also shows a strong increase in banks selling the home loans through brokers, rather than going direct to customers – 798 of the new mortgages were offered through intermediaries, compared with just 166 being offered purely direct to borrowers.

Lending continued to accelerate sharply in August, despite expectations that the boom – particularly in London – was coming to an end.

Loan applications increased 14 per cent on the year, led by a 19 per cent jump in remortgaging applications.

Fears of a rate hike continued to play on buyers’ minds – 94 per cent took out a fixed-rate loan, barely changed from 95 per cent in July.

The Mortgage Advice Bureau believes this is a sign the market has firmly recovered from the slowdown which hit when tougher rules on borrower affordability came into force in April.

“It is an encouraging sign that healthy competition can continue under the new regime, and shows that consumer choice remains intact: just with carefully monitored parameters in place to govern who can borrow and how much,” said head of lending Brian Murphy.

“It means the market recovery can continue on a steady footing and absorb the impact of the eventual base rate rise.”