Significant drop in range of mortgage deals

Since the onset of the global credit crunch last summer there has been a significant drop in the range of mortgage deals available on the market, according to a recent report, with lenders withdrawing more and more deals due to lack of funding and increasing cautiousness over who they are prepared to lend to. Industry officials estimate that the range of mortgage deals available on the market has dropped by two thirds since last July, reflecting the damaging effects that the credit crunch has had on the UK mortgage market.

Many lenders have suffered severe difficulties when it comes to getting finance on the wholesale money markets in order to fund their mortgage lending operations, and the cost of inter-bank lending has rocketed over recent months, driving up the cost of mortgage lending for banks. This is turn has had a knock on effect for consumers, with the interest rates on mortgages rising, the deposit levels required by lenders rising, and the availability of different mortgage deals plummeting, making it increasingly difficult and expensive for many consumers – particularly first time buyers and those with damaged credit – to get a mortgage.

The figures indicate that in July of last year there were over 15,500 different mortgage deals on offer, but the havoc caused by the credit crunch has now seen this figure plummet to under 6,000. Many building societies have also had to withdraw deals and restrict lending, as many have been inundated with applications from applicants that have been turned down by the mainstream banks.

Recent polls have suggested that many industry experts, including the lenders themselves, are expecting the number of mortgage deals available to continue falling over the coming months, and this is going to result in increased difficulties for consumers looking to get a mortgage or remortgage.

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