The UK mortgage market is displaying signs of resilience and growth, as shown by data from the Moneyfacts UK Mortgage Trends Treasury Report.
The number of mortgage choices for borrowers has more than doubled since October 2022, while the average lifespan of a mortgage deal has stabilised.
The total product count rose month-on-month to 5,264 options, marking the highest tally since February 2022 and more than twice the number available in October 2022.
The increased product options within the 75% and 85% loan-to-value (LTV) tiers suggest more stability across the market. The average lifespan of a mortgage product increased to 25 days from just 15 days in October 2022.
In terms of interest rates, both the average 2- and 5-year fixed rates decreased between the start of April and the start of May, settling at 5.26% and 4.97% respectively. The average 2-year fixed rate is now 0.29% higher than the 5-year equivalent. Conversely, the average 2-year tracker variable mortgage rate increased month-on-month to stand at 5.07%.
The average Standard Variable Rate (SVR), to which loans revert after the fixed rate period, continued to climb, reaching 7.37% – its highest level since December 2007.
Rachel Springall, finance expert at Moneyfacts, said: “The mortgage market is showing positive signs of resilience and growth, with product choice rising month-on-month. There is now more than double the number of options compared to October 2022.”
Springall also noted that while fixed rates had increased significantly following market turmoil in late 2022, the market has now stabilised with a healthier average lifespan of 25 days for mortgage products. She highlighted the growth in options for borrowers with a 15% or 25% deposit or equity, where choice is at an all-time high.
Despite variable rates continuing to rise, fixed mortgage rates have dropped on a month-on-month basis. However, Springall warned that fixed interest rates are likely to start to rise due to volatile swap rates. She added: “Borrowers debating whether to fix or stay would be wise to seek advice to help them find the right option that suits their individual circumstances.”
Nick Mendes, mortgage technical manager at John Charcol, said that the broker had seen confidence slowly returning following the dramatic fallout of last year.
He said: “Since the start of this year the doom and gloom predictions of continuing high rates and a substantial property price dip seems to have settled.
“While higher than previous years mortgage rates have fallen to reasonable levels, which is highlighted in the number of mortgage applications for Q1 increase. This is no doubt helped by homeowners who delayed making any decision while rates average 6% now opting to either remortgage or product transfer.
“With regards to purchases, confidence has certainly grown among first-time buyers now as the sense of any potential property dip not going to reach 10 or 20% that was being tooted, the main barrier continues to be the lack of stock.
“In the meantime Homeowners are opting to remain and delay any prospective home moving, with purchases activity lower than previous years, lenders are focusing on gaining a larger share of the remortgaging market  – which is highlighted with lower rates compared to purchase products.
“While the prospect of further base rate rises remain in the picture, clients are certainly not letting this dampen there spirits and remain optimistic.”
