With the pent-up demand in the property market, mortgage choice is also rising due to competition amongst lenders.

Lending in the property market has reached a record high, as the property market continues to show strong signs since the global financial crisis.

In March 2021 alone, homeowners collectively borrowed over £35.6bn! This demand has been caused by the rush to complete property purchases before the extended end of the Stamp Duty Holiday. On June 30th, the £500,000 Stamp Duty Holiday threshold will finish, where from July 1st until September 30th, a tapered period of £250,000 will apply until the standard Stamp Duty rates apply from October 1st 2021.

With many people looking to complete before June 30th to benefit from the higher amount of £500,000 Stamp Duty Holiday, over 82,700 mortgages were approved in March, 13% higher than the previous year.

Re-mortgaging was more subdued, with a lower amount of 34,800 mortgages approved for homeowners who were not looking to move to a new home and just wanted to switch to a better rate. This figure most likely reflects a seasonal trend rather than available mortgage products, as lenders have continually been adding more products since November 2020 to remain competitive.

First-time buyers

Before the global financial crisis, first-time buyers were leading the property market in the number of property purchases compared to existing homeowners. However, with the pandemic hitting hard, lenders retracted mortgages with a lower LTV (Loan-To-Value).

However, with the property market showing strong signs and looking to remain buoyant for the remainder of this year, lenders have started to add more mortgage products for buyers with a lower LTV. There are now nearly 200 mortgage products in the market for buyers with a deposit of just 5%.

The increase in confidence from lenders for this sector has come after the government's launch of the 95% mortgage guarantee scheme. But outside this scheme, there is now a wide range of available mortgage products. There are nearly 500 mortgage products on the market for buyers with a 10% deposit, whereas there were only 100 products available last year.

Existing homeowners

For existing homeowners moving up or down the property ladder, there are more than 4,000 mortgage products available on the market, double what was available last year pre-pandemic levels.

For those with a larger deposit of 40% or more, rates below 1% are available with some lenders, as they are looking to win new business with buyers with a more significant deposit. However, these deals are ever-changing, with the average mortgage deal remaining on the market for an average of 28 days.

Buy-to-let investors

Mortgage choice has also soared for buy-to-let investors, with nearly 2,500 different mortgages available to choose from. That's 1,000 more than last year - and more than there were in 2019 too.

A combination of strong house price growth, high tenant demand and rising rents, has made lenders feel more confident about offering mortgages to investors with only smaller deposits.

There is also increased choice for people with a 20% deposit, with nearly 150 loans to choose from, compared with just 19 a year earlier.

Investors who have a 25% deposit have the most choice, with nearly 900 mortgages available, more than double the number on offer 12 months ago.

There is more good news for landlords, as interest rates on buy-to-let mortgages have been on a steady downward trajectory since the start of the year, as competition in this sector of the market continues to heat up.

This trend has been seen across two-year and five-year fixed rate deals and mortgages at all loan to value ratios, pushing average interest rates on two-year fixed rate products below 3%.

Whether you are looking to Buy, Sell, Let or have your property portfolio managed by us, speak with one of our property professionals today by calling us on 0116 275 8888!

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