22 Dec 2024

Specialist UK Mortgages...

FTB Mortgage Market Ignored

Moneyfacts research of the residential mortgage market reveals 398 changes to mortgage product rates during the month of July, equivalent to almost 13 per day.

The increase in activity comes at a time when mortgage lending is under scrutiny from the Bank of England (BoE), who are looking for tangible results following its announced ‘Funding for Lending scheme’, which allows some banks to borrow up to 5% of their existing loan books for a 0.25% fee for a period of up to four years.

Of the 398 rate changes (113 variable and 285 fixed rates), 205 were rate reductions (39 variable and 166 fixed rates).

At face value, this seems like good news; however, it is still the less risky big deposit mortgages that are set to benefit most.

	Number of changes to rates
Max LTV	Variable Rates	Fixed Rates
60%	11	47
65%	7	14
70%	0	30
75%	50	63
80%	16	17
85%	25	85
90%	4	26
95%	0	3
Source: Moneyfacts.co.uk

Sylvia Waycot, spokesperson for Moneyfacts.co.uk, said:

“The combination of new fixed rate mortgages on the market has brought the average fixed rate down 0.04%, from 4.78% to 4.74%.

“The five-year fixed rate mortgage has been most affected by the rate cuts taking that average down by 0.09%, from 4.84% to 4.75%.

“Industry experts and consumers alike will have been hoping to see the first time buyer market rejuvenated by the BoE Funding for Lending scheme, but current evidence suggests that those in the 90%+ LTV bracket are not the ones getting the best value from the recent rate cuts.

“Mortgage lenders were already lending to the more favoured, less risky higher deposit market, so unless there is a big downward shift in rates in the higher loan-to-value market the Bank of England funding scheme will be a lost opportunity.”

Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.

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