The average “shelf life” of a mortgage was twice as long in early May as it was a month earlier, easing the pressure on borrowers hunting for a new product – but first-time buyers may still find it harder to grab a deal, according to a financial information website.
Many mortgage deals were pulled amid financial uncertainty prompted by the conflict in the Middle East, although some mortgage products have been trickling back on to the market in recent weeks.
By the start of May, the average mortgage was sitting on the market for 16 days typically before being withdrawn, according to financial information website Moneyfacts.
This is double the average eight-day shelf-life of a mortgage recorded by the website in early April.
Moneyfacts said that the choice of mortgage products has shrunk by around 10% since the start of March, with higher loan-to-value deals requiring a deposit of 10% or less disappearing at a faster rate of 14%, in a blow to first-time buyers in particular.
Rachel Springall, a finance expert at Moneyfacts, said: First-time buyers will be frustrated to see the choice of higher loan-to-value (LTV) options drop by 14% since the start of March.
“The global pressures caused by the conflict in the Middle East completely flipped the expected path of inflation and future rate setting, which caused lenders to pull deals and hike fixed rates.
“Thankfully, the calm of product churn during April compared to the upheaval in March resulted in the average shelf-life of a deal returning to a more realistic window, doubling from around a week to just over two weeks.
“First-time buyers or those with little equity of just 5% hoping to grab a two or five-year fixed deal will find average fixed rates remain above 6%.
“It is essential that new buyers in particular feel supported, to keep the market moving, but affordability strains are evident.
“Higher interest rates, the lack of affordable housing and the potential for a spike in the cost of living can all damage the mortgage market.”
Ms Springall added: The strain of high payments will make borrowers consider a longer-term deal, such as for 35 years or 40 years to make initial payments more manageable.
“However, this means paying more interest overall, so making overpayments where possible to reduce the debt and mortgage term is wise.”
Mary-Lou Press, president of NAEA (National Association of Estate Agents) Propertymark, said: “While the mortgage market has calmed slightly after recent volatility, first-time buyers are still facing significant pressure.
“Rates have eased marginally, but affordability remains stretched, particularly for those with smaller deposits.
“On the ground, buyer demand remains resilient, but affordability challenges are clearly influencing purchasing decisions.
“Many buyers are becoming more cautious, reassessing budgets, extending timelines, or looking at smaller properties and different locations to make home ownership achievable.”
She added: “For borrowers navigating the current environment, taking professional mortgage advice remains crucial as financial criteria and lender appetite continue to shift.”