The data shows there are now more products available for mortgage borrowers than at any point since 2008, as competition among lenders intensifies.
In August, there were 15,838 mortgage products available in the market: a 10% increase from July (14,395) and the biggest monthly percentage rise since April 2011. This was largely driven by 16% (1,520) growth in broker products from July to August to reach 11,257.
Despite the leap in broker products and the total reaching a post-recession high, the number of direct-only products dropped by 2% from 4,658 in July to 4,581 in August. As a result, brokers’ share of the total product range jumped from 68% to 71%, while the direct-only share fell from 32% to 29%.
The data is another sign of intermediaries’ growing importance in the mortgage market. According to the figures from the Council of Mortgage Lenders (CML), brokers’ share of loans in Q2 2015 was 69%, up from 62% a year earlier.
Table 1: Broker products increase by 16% in August, while direct products fall by 2%
|
Broker products (average) |
Broker monthly change |
Direct products (average) |
Direct monthly change |
|
|
Aug-14 |
8,576 |
10% |
3,689 |
5% |
|
Sep-14 |
8,542 |
0% |
3,527 |
¯ 4% |
|
Oct-14 |
8,812 |
3% |
3,663 |
4% |
|
Nov-14 |
8,694 |
¯ 1% |
3,648 |
0% |
|
Dec-14 |
8,560 |
¯ 2% |
4,365 |
20% |
|
Jan-15 |
8,555 |
0% |
4,217 |
¯ 3% |
|
Feb-15 |
8,768 |
2% |
4,172 |
¯ 1% |
|
Mar-15 |
9,126 |
4% |
4,199 |
1% |
|
Apr-15 |
9,309 |
2% |
4,230 |
1% |
|
May-15 |
9,384 |
1% |
4,594 |
9% |
|
Jun-15 |
9,602 |
2% |
4,631 |
1% |
|
Jul-15 |
9,737 |
1% |
4,658 |
1% |
|
Aug-15 |
11,257 |
16% |
4,581 |
¯ 2% |
With product numbers now at their highest since the recession, the Index – using data from Moneyfacts.co.uk – shows average rates continued to fall to all-time lows during August, as lending competition and the 0.5% base rate continue to drive pricing downwards.
Two year fixed rates saw the biggest annual fall to 2.68% in August, dropping by 103 basis points (bps) year-on-year from 3.71% in August 2014. Three year and five year fixed rates also fell to record lows last month, with three year pricing reaching 3.11% (down by 68bps year-on-year) and five year pricing reaching 3.24% (down 97bps in 12 months).
Two year tracker rates also dropped 65bps from 2.66% in August 2014 to 2.01% in August 2015, although this was slightly higher than the low of 2.00% recorded in July 2015.
Brian Murphy, head of lending at Mortgage Advice Bureau, said: “There has been a seismic shift over the last year as brokers have become an even bigger gateway for customers hoping to secure a mortgage. The product range has never been bigger since the recovery began, and no single lender can hope to rival the choice available via a whole-of-market adviser.
“Rather than being overwhelmed by options, customers are increasingly leaning on brokers to do the legwork for them. Taking this step avoids the risk of consumers picking what looks like the most attractive headline rate, going direct to that lender and missing out on a wider choice of products that may be better suited to their needs.
Fierce competition in the market is contributing to record low rates and a large volume of product launches. A base rate rise is still hovering in the background, but the second half of the year often sees lenders pricing with year-end targets in mind and looking to attract new business. Getting advice from a broker can help borrowers find the best solution from the thousands currently on offer.”
