Number Of Homeowner Loan Products Drops By 90 Per Cent In One Year
Anybody who has applied for a new homeowner loan or mortgage in recent months will probably be aware of how restricted the market is at the present time and we have reported in previous months about how the total number of homeowner loan products has been reducing since the beginning of the credit crunch.
But the latest figures from Trigold, the mortgage sourcing system for mortgage brokers, has revealed that the total number of different loan products available is now 90 per cent lower than it was at the same time last year.
In February 2008 there were a total of 31,825 different products available for someone looking for a homeowner loan to choose from, but by the end of February this year, that figure had dropped to just 2,983. The areas worst affected are as expected, high loan to value ratio products and bad credit loans, which are now extremely limited in choice for potential borrowers, but even mainstream loan products have also suffered as banks and building societies still remain reluctant to offer loans to anybody.
On a more positive note, the level of affordability on homeowner loans has increased dramatically over the course of the last twelve months, mainly due to particularly low interest rates and buyers being forced to find larger deposits to put down on properties due to the low limits on loan to value ratios.
The latest interest rate cut last week is unlikely to have a significant impact on the number of available loan products, but it is more likely to have a negative effect rather than a positive one, as more savers are encouraged to move their savings away from banks and building societies in search of better interest rates, thereby further limiting the available funds for new lending.
