Fierce competition between lenders has seen the number mortgage products available to homebuyers balloon to a near-eight-year high in January, new figures show.
The Mortgage Advice Bureau (MAB) has counted 17,132 products on the market in January, which is 34 per cent ahead of the 12,771 products available in January last year and the highest number seen since March 2008 when there were 23,802.
The advisory firm said the growing range of products together with stricter lending rules brought in following the Mortgage Market Review (MMR) is driving more homebuyers to use an independent broker to find a mortgage rather than going directly to one lender.
As a result the number of products distributed through brokers increased by 42 per cent year-on-year to 12,180, compared with a 17 per cent rise in direct-only products.
Broker products now accounts for 71 per cent of the total product range compared with 67 per cent in January last year.
The number of applications recorded by brokers was 36 per cent higher than in January 2015, with remortgage applications seeing the biggest annual uplift of 56 per cent compared with 28 per cent in the purchase market.
“The new affordability criteria and stress tests introduced as a result of MMR make applying for a mortgage a more time consuming process,” Brian Murphy, the MAB’s head of lending said.
“It no longer makes sense to spend this time talking to just one provider when you could be researching the whole market with an independent broker. Lenders that have historically opted not to distribute through brokers have now changed their stance to reflect this.”
Despite a bullish start to the year, MAB’s index showed that consumers remained cautious by increasingly opting for fixed rate deals – rising from 87.5 per cent to 91 per cent year-on-year for remortgage borrowers and by 1.6 percentage points to 94.7 per cent for purchase borrowers.
Rates also remained at a record low of 2.56 per cent for a two year fixed rate mortgage, according to Moneyfacts Average Mortgage Rate.