Moneyfacts: Mortgage market outlook 'mixed'

Date:Monday 13th October 2008

Mortgage lenders are withdrawing higher loan-to-value products although enough deals remain, Moneyfacts has said.

The personal finance information website said there is a "mixed outlook for the mortgage market".

Only 3,281 mortgages are available, the lowest since the credit crunch started.

Moneyfacts said that while mortgage were driven by pricing during the boom years, they are now influenced by risk, with a decrease in many products for a loan-to-value of 90 to 95 per cent.

Lenders are trying to protect against negative equity by bringing in more mortgages requiring deposits of 40 per cent or more.

In addition, the better rates are found on mortgage deals with a maximum loan-to-value of 60 per cent, with such products rising by 84 per cent to number 155.

But despite reduced choice, Moneyfacts said that enough deals remain for borrowers to find something suitable.

At the end of September, Moneyfacts reported a mortgage market "Black Monday" in which 11.4 per cent of mortgage deals were withdrawn.

Moneyfacts warned at the time that if more lenders culled products, the remaining ones were likely to face a "bottleneck".