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Mortgage market is tightening up

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A jump in demand for property mortgages has coincided with a sharp fall in the number of mortgage offers available, comparison website Moneyfacts has reported.

It found that in the five months since March, the number of mortgage deals available to consumers has more than halved, falling from 5,222 on 1 March to just 2,526.

‘Introduction of the stamp duty holiday and record low average interest rates following an enforced period of shutdown, has seen demand for mortgages escalate in recent weeks’, said finance specialist Eleanor Williams. ‘However, product choice and availability remains a key issue for mortgage borrowers, with this month continuing the downward trajectory we saw between June and July.

‘There were 2,526 live products as of the 1 August, a fall of 202 compared to last month, and 2,696 fewer than the number of products on offer at the start of March, meaning there is 48 per cent less choice available to consumers as the industry continues to feel the impact of the Coronavirus pandemic’.

First-time buyers have been particularly hard-hit, with both the number of deals available to them down and the interest rates on 90 per cent LTV deals rising to a current average of just over 3 per cent.

‘Although mortgage rates at lower LTVs have only started to rise, lenders are becoming more cautious during this period of economic uncertainty and, as a result, it could see rates rising further’, said Moneyfacts.