With 3,927 products now on offer, net borrowing levels in March were higher than October 2006 at the peak of the pre-financial crash mortgage boom, according to Moneyfacts.
Moneyfacts suggests this shows lender confidence that ‘demand will remain prevalent in the coming months’.
Research showed there are now 78 more deals at 95 per cent loan to value (LTV) and 41 more at 90 per cent LTV in March against the month before, well ahead of the launch of the government guarantee scheme in mid-April.
Spike in 95 per cent LTV deals
The data showed growth in availability was cross-tier, but the most significant increase was at 95 per cent LTV, which rose from 34 deals last month to 112. In good news for smaller deposit holders, the proportion of the market where deals are available at 80 per cent LTV or above has risen to 49 per cent against 31 per cent this time last year.
After nine months of increasing rates, the average two-year fix dropped marginally by 0.01 per cent to 2.57 per cent, but the average five-year fix rose by 0.02 per cent to 2.79 per cent.
The average length of time a mortgage is offered to borrowers also increased by three days to 32 offering applicants longer to secure their product.
Eleanor Williams, finance expert at Moneyfacts, said: “The sense of optimism in the mortgage sector continues, with product choice continuing its climb back towards pre-pandemic levels.”
Housing supply remains an obstacle for would-be buyers, she added, and that this shortfall may well continue to drive up house prices.
“Lenders have been vocal about their confidence in the mortgage market as the UK lockdown eases, which is refreshing to see after the turmoil the pandemic created for home movers and those looking to switch their deal for all walks of life.
“There has been a reduction to the average fee charged (excluding no-fee deals) compared to last month,” she added.
Vikki Jefferies, proposition director at Primis Mortgage Network, said: “The work of advisers will be a huge asset to lenders who are driving the increase in product availability, particularly amongst those who have been disproportionately impacted by the Covid-19 crisis. Advisers will be especially key in highlighting the variety of solutions that are available to younger borrowers, which will also go a long way towards boosting confidence among this cohort.”
“Over the coming months, lender appetite and buyer demand will continue to grow as the UK’s vaccine roll-out and economic recovery progresses. It will be encouraging to see all sides of the mortgage market working together further to support this activity and underpin our road to recovery,” she added.