Reduction in mortgages available for new borrowers

14 October 2008

Mortgage availability drops by two thirds

According to Moneyfacts the number of mortgage deals available to new borrowers dropped to its lowest level since the credit crunch began.

There were just 3,821 mortgages available to new borrowers on Friday, compared with 10,726 12 months ago, said Moneyfacts.

Just over a year ago, when the market was at its peak in July 2007, there were 13,027 products.

In other news, borrowers were dealt another blow when Abbey, the second biggest mortgage lender in the UK, confirmed that it was not passing on the cut in UK interest rates to new tracker offers.

Darren Cook of Moneyfacts said mortgage availability had been affected by the reluctance of banks to offer deals to people with a deposit of 5% or 10% because of the risks involved.

“Choice may be reducing, but there are still enough products out there for borrowers to try and find a suitable deal that suits individual circumstances,” said Mr Cook.

“The difficulties lie in the lack of liquidity within the market and providers having no appetite or being unable to lend on a larger scale.

“In essence, the price list shows that mortgages are getting a little cheaper, but the stock rooms are currently nearly empty,” he added.

Click the link to use our mortgage finder