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Buoyancy is back in the housing market


In the past few weeks the big news in the mortgage market has been the launch of products as providers revise their rates, fees or LTVs and become more competitive.

Indeed, with the Monetary Policy Committee opting to keep the Bank of England base rate at 0.5% all parties seem to be working hard to get the market moving.

For me, the sector to watch is that catering to first-time buyers. According to data from our parent, there are currently 2,656 mortgage products available, 1,430 of which are available to first-timers.

The average LTV for first-timers is 76%, with an average rate of 4.81%. Although this level of deposit may not seem attractive at least it shows the market is becoming more accommodating.

In further support of this trend, data shows that there are currently 406 products available at 85% LTV. This time last year there were only 221 such deals around. It seems that confidence is slowly but surely returning to the market.

Despite this shift in confidence some lenders are continuing to err on the side of caution, hesitant to price their products aggressively.

There is still wide variation when it comes to SVRs, ranging from 2.5% at Lloyds TSB and Cheltenham & Gloucester to 6.45% at Chesham Building Society.

Nonetheless, we are seeing a new-found buoyancy in the market. We have seen affordability improve substantially as a result of lower mortgage rates, and as house prices begin to stabilise buyers are beginning to raise their heads above the parapet once more.


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