The mortgage market has undergone something of a renaissance over the past twelve months. In March and April 2009 lender appetite for risk was declining almost by the day and reached rock bottom last summer, when borrowing was harder than it had ever been and product availability was at record lows.

Today, product numbers have recovered somewhat. For example, there are approximately 35 per cent more products available to brokers than at the nadir of the market during the mid summer months of 2009. More importantly, though, lender appetite for risk has increased.

In stark contrast to last year, there are currently around 30 different brands offering products in the high (90 per cent) LTV range, against only a dozen or so at the market low point last year. It is still not easy to get loans at this borrowing level, but it is at least possible.

MORTGAGE AVAILABILITY

For borrowers looking to buy for the first time, move home or refinance their existing arrangements, there are some excellent deals available at present. At the time of writing in April, headline rates include HSBC’s 90 per cent FTB 4.49 per cent tracker, with no fee.

For those looking further down the risk curve (75 per cent LTV), Britannia Building Society is offering a very competitive 2-year 3.19 per cent fixed rate with a £999 fee. For borrowers requiring certainty over a longer period, both the Co-operative Bank and Britannia have a 5- year 4.74 per cent fixed rate with a £999 fee.

REMORTGAGING

The remortgage arena has also seen a major reduction in activity relative to historic levels. Many would-be remortgage customers simply cannot re-finance due to reduced equity levels following asset price falls, changes in personal financial circumstances, lenders significantly increasing their underwriting requirements and, most important perhaps, their assessment of a borrower’s ability to service debt.

With many borrowers sitting on historically low Standard Variable Rates (SVR) many are in no need to switch; indeed, many would currently be worse off by doing so. We are, though, starting to see some lenders quietly raise their SVRs and this will have the effect of pushing some borrowers to re-consider remortgaging — presuming they can do so.

For anyone currently considering remortgaging, again lender appetite has improved in recent months with rates continually being sharpened to attract good quality borrowers. Headline rates include Yorkshire Building Society with a 2-year fixed rate up to 85 per cent LTV at 4.49 per cent with a £495 fee, or an Accord Mortgages broker exclusive at 4.64 per cent for the same period. For people with greater levels of equity, a 60 per cent LTV remortgage onto a 5-year fixed rate can be obtained for 4.44 per cent with Accord Mortgages or 4.49 per cent with Abbey.

In recent months, we have seen a greater proportion of borrowers opting for variable rate products (mainly tracker deals) although the pendulum is starting to swing back a little towards fixed rates as people become more wary of the effect of increases to the Base rate. However, when those rises will come remains very difficult to predict.

BUY-TO-LET

Within the buy-to-let market, activity levels remain more subdued than the mainstream residential arena and this is largely due to lenders being far more cautious than they have been historically. Competition in this sector is far weaker and only three or four lenders have any real appetite. With typical LTVs being limited to 75 per cent, only the professional or experienced landlord can access the market at this time.

Brian Murphy is Head of Lending, Mortgage Advice Bureau. www.mortgageadvicebureau.com