The number of mortgage products available in the UK has surged this summer to reach a new post-recession high.
There are now more products available for mortgage borrowers than at any point since 2008, according to new figures from the Mortgage Advice Bureau.
In August 2015, there were 15,838 mortgage products available in the market, a 10% increase from July (14,395) and the biggest monthly percentage rise since April 2011. This was largely driven by 16 per cent (1,520) growth in broker products from July to August to reach 11,257.
“Fierce competition in the market is contributing to record low rates and a large volume of product launches,” explains Brian Murphy, head of lending at Mortgage Advice Bureau. Indeed, the data follows new figures from the Bank of England, which show that lending has reached a 2015 high this summer.
The data is also a sign of intermediaries’ growing importance in the mortgage market. According to the figures from the Council of Mortgage Lenders (CML), brokers’ share of loans in Q2 2015 was 69 per cent, up from 62 per cent a year earlier.
With product numbers now at their highest since the recession, the Index – using data from Moneyfacts.co.uk – shows average rates continued to fall to all-time lows during August, as lending competition and the 0.5 per cent base rate keep driving prices down.
Two year fixed rates saw the biggest annual fall to 2.68 per cent in August, dropping by 103 basis points (bps) year-on-year from 3.71 per cent in August 2014. Three year and five year fixed rates also fell to record lows last month, with three year pricing reaching 3.11 per cent (down by 68bps year-on-year).
Murphy says there has been a “seismic shift” in the industry because brokers have become a bigger gateway for customers:
“Rather than being overwhelmed by options, customers are increasingly leaning on brokers to do the legwork for them. Taking this step avoids the risk of consumers picking what looks like the most attractive headline rate, going direct to that lender and missing out on a wider choice of products that may be better suited to their needs.”