Choice of mortgage deals shrinking
Filed under: Mortgages
Comparison website MoneySupermaket highlighted the struggle faced by first-time buyers and those with smaller deposits to find a mortgage, despite the recent launch of a scheme to encourage lending.
Mortgage Advice & Info
The Bank of England and the Treasury fired an £80 billion "funding for lending" scheme into action at the start of this month to boost lending to households and businesses, but MoneySupermarket said there is little to show the initiative is doing much to help mortgage borrowers with smaller deposits.
The website found 318 mortgages available at 90% loan-to-value (LTV) six months ago, compared with 244 today. There were 330 such deals on the market a year ago.
There are 28 mortgages on offer at 95% LTV compared with 49 six months ago, although the numbers have more than doubled compared with a year ago, when there were 13.
Clare Francis, a mortgage expert at MoneySupermarket, said: "Our analysis shows the continuing difficulty facing first-time buyers and those with smaller deposits looking to find a suitable mortgage.
"Despite the launch of the funding for lending scheme which was designed to encourage further mortgage lending by the banks, there appear to be few signs that the initiative is helping those with small deposits."
Lenders have also tightened borrowing criteria in recent months amid the uncertain economy, making it harder to take out a mortgage.
A separate study released by Experian found that more people have resorted to lying about their finances in recent months when applying for a mortgage.