More mortgages for borrowers with lower deposits

The proportion of mortgages available to people with small deposits has risen to its highest level for two years but there is little sign that banks are increasing their lending levels, research indicated today.

Loans that require borrowers to put down a deposit of at least 25% of their home's value now account for less than half of the market for the first time since January 2009, according to financial information group Moneyfacts.

Mortgages that require a deposit of this size now account for 46% of all available deals, with loans which accept smaller sums or no deposit at all accounting for the remaining 54%.

Borrowers with a 20% deposit have seen a three-fold increase in the number of deals they can choose between in the past two years, with these rising from just 97 in February 2009 to 390 now.

There has also been a rise of just over 250% for people with 15% to put down, with 560 loans now available, while choice for borrowers with just a 10% deposit has more than doubled, rising from 94 products two years ago to 214 now.

The only area of the market where choice has declined is for people with a 40% deposit, with the number of loans for these borrowers falling by 28%, as lenders instead make their best deals available to those with 25% or more to put down.

Overall, the number of different mortgages on the market has more than doubled in the past two years, rising from 1,097 to 2,447.

But Moneyfacts cautioned that the increase in choice for people with smaller deposits did not necessarily mean lenders were more willing to advance money to these customers.

Michelle Slade, spokewoman for, said: "Although lenders' windows may be full of best buy deals, it doesn't mean they are wanting to lend.

"The increase in the number of mortgage deals for those with smaller deposits is encouraging, but only a limited number of such mortgages are likely to be approved.

"Borrower affordability remains the key factor in lending decisions and lenders remain strict over which borrowers they will accept."

She added that banks and building societies' lending criteria was likely to get even tighter in future as they implemented tough affordability checks which are being proposed by the Financial Services Authority.

Figures released by the Bank of England yesterday showed that net lending in 2010 fell to just £8.15 billion, down from £11.33 billion in 2009 and the lowest level since records began in 1987.

The figure was worse than the £9 billion the Council of Mortgage Lenders had predicted, and lending levels are expected to fall further to just £6 billion in the coming year.

There was also evidence that the mortgage market finished 2010 on the back foot, with net lending contracting by £298 million in December, as homeowners repaid more than lenders advanced, while the number of mortgages approved for house purchase fell to its lowest level since March 2009.

Life and Style
love + sex A new study has revealed the average size - but does that leave men outside the 'normal' range being thought of as 'abnormal'?
The Palace of Westminster is falling down, according to John Bercow
voices..says Matthew Norman
Steve Bruce and Gus Poyet clash
Arts and Entertainment
Jake and Dinos Chapman were motivated by revenge to make 'Bring me the Head of Franco Toselli! '
arts + ents Shapero Modern Gallery to show explicit Chapman Brothers film
Arts and Entertainment
Kurt Cobain performing for 'MTV Unplugged' in New York, shortly before his death
music Brett Morgen's 'Cobain: Montage of Heck' debunks many of the myths surrounding the enigmatic singer
Brendan Rodgers
football The Liverpool manager will be the first option after Pep Guardiola
Life and Style
Christian Benteke of Aston Villa celebrates scoring the winner for Aston Villa
Arts and Entertainment
Myanna Buring, Julian Rhind-Tutt and Russell Tovey in 'Banished'
TV Jimmy McGovern tackles 18th-century crime and punishment
Arts and Entertainment
Paul Whitehouse as Herbert
arts + ents
Bill O'Reilly attends The Hollywood Reporter 35 Most Powerful People In Media Celebration at The Four Seasons Restaurant on April 16, 2014 in New York City
media It is the second time he and the channel have clarified statements
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Sales Executive - OTE £40,000

    £15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

    Austen Lloyd: Law Costs HOD - Southampton

    £50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...

    SThree: Recruitment Resourcer

    £20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...

    Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

    £25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

    Day In a Page

    Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

    Climate change key in Syrian conflict

    And it will trigger more war in future
    How I outwitted the Gestapo

    How I outwitted the Gestapo

    My life as a Jew in wartime Berlin
    The nation's favourite animal revealed

    The nation's favourite animal revealed

    Women like cuddly creatures whilst men like creepy-crawlies
    Is this the way to get young people to vote?

    Getting young people to vote

    From #VOTESELFISH to Bite the Ballot
    Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

    Poldark star Heida Reed

    'I don't think a single bodice gets ripped'
    The difference between America and Israel? There isn’t one

    The difference between America and Israel? There isn’t one

    Netanyahu knows he can get away with anything in America, says Robert Fisk
    Families clubbing together to build their own affordable accommodation

    Do It Yourself approach to securing a new house

    Community land trusts marking a new trend for taking the initiative away from developers
    Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

    David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

    The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
    Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

    Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

    Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
    With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

    Money, corruption and drugs

    The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
    America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

    150 years after it was outlawed...

    ... America's first slavery museum is established in Louisiana
    Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

    Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

    The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
    Tony Oursler on exploring our uneasy relationship with technology with his new show

    You won't believe your eyes

    Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
    Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

    Moores must go. He should never have been brought back to fail again

    The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
    War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

    The battle for Mosul will unleash 'a million refugees'

    Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn