Shelf life for mortgages equal to lowest on record

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Eleanor Williams, Press Officer
Eleanor Williams, Press Officer / Finance Expert T: 01603 476205 E: Email Eleanor
16/08/2021

Shelf life for mortgages equal to lowest on record

Shelf life for mortgages equal to lowest on record

The latest Moneyfacts UK Mortgage Trends Treasury Report data, recently published, explores how, after increased transaction levels were recorded by HMRC in Q2, sustained growth in product choice and further reductions in the overall average fixed rates have been evident. Lenders appear to be continuing rate re-pricing at pace as they work hard to appeal to prospective customers with renewed options.

 

The latest Moneyfacts UK Mortgage Trends Treasury Report data, recently published, explores how, after increased transaction levels were recorded by HMRC in Q2, sustained growth in product choice and further reductions in the overall average fixed rates have been evident. Lenders appear to be continuing rate re-pricing at pace as they work hard to appeal to prospective customers with renewed options.

 

  • Borrowers looking to secure a new deal may find they have a limited time to apply, as our latest data shows that the average shelf life of a mortgage at 21 days is equal to the lowest we have ever recorded, which was in May 2017 and our electronic records run back to 2011.
  • Choice continues to improve for borrowers, increasing for the tenth consecutive month, rising by 148 products to 4,660 – the highest it has been since March 2020. While the total number of products is unsurprisingly higher now than during the height of the pandemic this time last year, current availability has recovered to 93% of the level seen in August 2019 (5,009).
  • For the second consecutive month, both the average overall two-year and five-year fixed rates fell, now sitting at 2.52% and 2.75% respectively. Both rates dropped by 0.03%, seeing the average overall two-year at its lowest level since January 2021, and the average five-year fixed rate reached its lowest since March 2021.
  • Borrowers looking to secure a new deal may find they have a limited time to apply, as our latest data shows that the average shelf life of a mortgage at 21 days is equal to the lowest we have ever recorded, which was in May 2017 and our electronic records run back to 2011.
  • Choice continues to improve for borrowers, increasing for the tenth consecutive month, rising by 148 products to 4,660 – the highest it has been since March 2020. While the total number of products is unsurprisingly higher now than during the height of the pandemic this time last year, current availability has recovered to 93% of the level seen in August 2019 (5,009).
  • For the second consecutive month, both the average overall two-year and five-year fixed rates fell, now sitting at 2.52% and 2.75% respectively. Both rates dropped by 0.03%, seeing the average overall two-year at its lowest level since January 2021, and the average five-year fixed rate reached its lowest since March 2021.

Mortgage market analysis

 

Aug-19

Aug-20

Jul-21

Aug-21

Fixed and variable rate products

Total product count - all LTVs

5,009

2,526

4,512

4,660

Product count - 95% LTV

391

20

253

275

Product count - 60% LTV

572

500

561

577

All LTVs

Average two-year fixed rate

2.49%

2.08%

2.55%

2.52%

Average five-year fixed rate

2.84%

2.34%

2.78%

2.75%

95% LTV

Average two-year fixed rate

3.24%

4.25%

3.79%

3.69%

Average five-year fixed rate

3.63%

3.85%

4.01%

3.93%

60% LTV

Average two-year fixed rate

1.86%

1.71%

1.58%

1.55%

Average five-year fixed rate

2.23%

1.98%

1.81%

1.79%

All products

Average shelf-life (days)

48

29

30

21

Data shown is as at the first available day of the month, unless stated otherwise.

Source: Moneyfacts Treasury Reports

Mortgage market analysis

 

Aug-19

Aug-20

Jul-21

Aug-21

Fixed and variable rate products

Total product count - all LTVs

5,009

2,526

4,512

4,660

Product count - 95% LTV

391

20

253

275

Product count - 60% LTV

572

500

561

577

All LTVs

Average two-year fixed rate

2.49%

2.08%

2.55%

2.52%

Average five-year fixed rate

2.84%

2.34%

2.78%

2.75%

95% LTV

Average two-year fixed rate

3.24%

4.25%

3.79%

3.69%

Average five-year fixed rate

3.63%

3.85%

4.01%

3.93%

60% LTV

Average two-year fixed rate

1.86%

1.71%

1.58%

1.55%

Average five-year fixed rate

2.23%

1.98%

1.81%

1.79%

All products

Average shelf-life (days)

48

29

30

21

Data shown is as at the first available day of the month, unless stated otherwise.

Source: Moneyfacts Treasury Reports

Eleanor Williams, Finance Expert at Moneyfacts, said:

“Insight from HMRC attributes the increase in property transactions over the last four quarters to both the introduction of the stamp duty land tax (SDLT) holiday and ongoing strength in the housing market. Although the SDLT holiday is beginning to taper towards its end, there may well be continued momentum in the market as the “race for space” appears to be continuing and lenders could be looking to entice borrowers who for varying reasons may not have been able to proceed before now.

“Our data shows that the amount of choice available to consumers has risen again this month with 4,660 total products on offer, the highest recorded in seventeen months. This demonstrates the level of recovery in the residential sector where, for only the second consecutive month since June 2018, availability rose across all the individual loan-to-value (LTV) brackets as lenders endeavour to accommodate borrowers with varying levels of deposit or equity.

“Availability in the lower and mid-LTV sectors has rebounded, where borrowers looking at 80% or 85% LTV options have 152 and 22 more products to choose from than in August 2019. Choice continues to improve in the higher LTV tiers, with growth at 90% and 95% LTV increasing by a further 25 and 22 deals this past month alone. This reflects that, likely supported by the introduction of the Mortgage Guarantee Scheme, providers are prepared to cater to this traditionally higher-risk demographic, although their desire to do so remains some way behind where this was compared to a pre-pandemic August 2019 as there are currently 199 and 116 less deals to choose from than there were two years ago.

“Further good news is that both the average overall two and five-year fixed rates fell by 0.03% this month. The two-year fixed rate of 2.52% is only 0.03% above where this sat two years ago, while the five-year equivalent of 2.75% is 0.09% below where it sat August 2019. These falls are perhaps fuelled not only by the growing number of lenders launching sub-1% deals predominantly in the lower LTV tiers, but we have also seen rate re-pricing across the higher LTV lending brackets, particularly at 90% LTV where the two-year fixed average fell by 0.14% and the five-year by 0.13% this month alone.


“This month has seen the average shelf life for a mortgage product reduce by 9 days to just 21 days, last seen in May 2017 and the joint lowest we have recorded. Borrowers considering their mortgage options may therefore find that products have a limited period when they are available, and so having the up-to-date market knowledge of a qualified adviser could be invaluable in ensuring they can secure their chosen product in time.”

Moneyfacts Treasury Reports are the definitive monthly analysis of Mortgage and Savings trends emailed in PDF format. Unsecured Lending trends analysis is emailed quarterly. Available by annual subscription, please call (01603) 476850.

Eleanor Williams, Finance Expert at Moneyfacts, said:

“Insight from HMRC attributes the increase in property transactions over the last four quarters to both the introduction of the stamp duty land tax (SDLT) holiday and ongoing strength in the housing market. Although the SDLT holiday is beginning to taper towards its end, there may well be continued momentum in the market as the “race for space” appears to be continuing and lenders could be looking to entice borrowers who for varying reasons may not have been able to proceed before now.

“Our data shows that the amount of choice available to consumers has risen again this month with 4,660 total products on offer, the highest recorded in seventeen months. This demonstrates the level of recovery in the residential sector where, for only the second consecutive month since June 2018, availability rose across all the individual loan-to-value (LTV) brackets as lenders endeavour to accommodate borrowers with varying levels of deposit or equity.

“Availability in the lower and mid-LTV sectors has rebounded, where borrowers looking at 80% or 85% LTV options have 152 and 22 more products to choose from than in August 2019. Choice continues to improve in the higher LTV tiers, with growth at 90% and 95% LTV increasing by a further 25 and 22 deals this past month alone. This reflects that, likely supported by the introduction of the Mortgage Guarantee Scheme, providers are prepared to cater to this traditionally higher-risk demographic, although their desire to do so remains some way behind where this was compared to a pre-pandemic August 2019 as there are currently 199 and 116 less deals to choose from than there were two years ago.

“Further good news is that both the average overall two and five-year fixed rates fell by 0.03% this month. The two-year fixed rate of 2.52% is only 0.03% above where this sat two years ago, while the five-year equivalent of 2.75% is 0.09% below where it sat August 2019. These falls are perhaps fuelled not only by the growing number of lenders launching sub-1% deals predominantly in the lower LTV tiers, but we have also seen rate re-pricing across the higher LTV lending brackets, particularly at 90% LTV where the two-year fixed average fell by 0.14% and the five-year by 0.13% this month alone.


“This month has seen the average shelf life for a mortgage product reduce by 9 days to just 21 days, last seen in May 2017 and the joint lowest we have recorded. Borrowers considering their mortgage options may therefore find that products have a limited period when they are available, and so having the up-to-date market knowledge of a qualified adviser could be invaluable in ensuring they can secure their chosen product in time.”

Moneyfacts Treasury Reports are the definitive monthly analysis of Mortgage and Savings trends emailed in PDF format. Unsecured Lending trends analysis is emailed quarterly. Available by annual subscription, please call (01603) 476850.

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Notes to editors

Pioneering financial comparison technology for over 30 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfacts is the UK's leading independent provider of finance product data. For over 30 years Moneyfacts' information has been a key driver behind personal finance product decisions.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room with ISDN (01603 230551) and Skype (Moneyfacts).

 

Notes to editors

Pioneering financial comparison technology for over 30 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfacts is the UK's leading independent provider of finance product data. For over 30 years Moneyfacts' information has been a key driver behind personal finance product decisions.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room with ISDN (01603 230551) and Skype (Moneyfacts).

 

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Rachel Springall Press Officer / Finance Expert
Eleanor Williams Press Officer / Finance Expert