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 Moneyfacts.co.uk, 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.

Sport
Floyd Mayweather will relinquish his five world titles after beating Manny Pacquiao
boxing
Arts and Entertainment
tvGame of Thrones season 5 ep 4, review - WARNING: contains major spoiliers!
News
Tottenham legend Jimmy Greaves has defended fans use of the word 'Yid'
people
Life and Style
tech
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Life and Style
Google celebrates Bartolomeo Cristofori's 360th birthday
techGoogle Doodle to the rescue
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Claims Administrator

    £16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

    Recruitment Genius: Senior SEO Executive

    £24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

    Recruitment Genius: Online Customer Service Administrator

    £16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

    Recruitment Genius: Digital Marketing Executive

    £18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

    Day In a Page

    Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

    Fishing is on Nigel Farage's mind

    Ukip leader casts a line to the disaffected
    Who is bombing whom in the Middle East? It's amazing they don't all hit each other

    Who is bombing whom in the Middle East?

    Robert Fisk untangles the countries and factions
    China's influence on fashion: At the top of the game both creatively and commercially

    China's influence on fashion

    At the top of the game both creatively and commercially
    Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

    The man known as GOD has a reputation for getting the job done

    Lord O'Donnell's three principles of rule
    Rainbow shades: It's all bright on the night

    Rainbow shades

    It's all bright on the night
    'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

    Bread from heaven

    Dutch survivors thank RAF for World War II drop that saved millions
    Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

    How 'the Axe' helped Labour

    UK will be 'run for the wealthy and powerful' if Tories retain power
    Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

    The price to be paid for challenging the rule of extremists

    A revolution now 'consuming its own children'
    Welcome to the world of Megagames

    Welcome to the world of Megagames

    300 players take part in Watch the Skies! board game in London
    'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

    Charlotte Gainsbourg on 'Nymphomaniac'

    Starring in one of the most explicit films ever
    Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

    Robert Fisk in Abu Dhabi

    The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
    Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

    Vince Cable exclusive interview

    Charging fees for employment tribunals was 'a very bad move'
    Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

    Iwan Rheon is returning to his Welsh roots

    Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
    Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

    Everyone is talking about The Trews

    Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
    Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

    It's time for my close-up

    Meet the man who films great whites for a living