The latest data released by Moneyfacts has revealed that, when it comes to available mortgage products, lenders are choosing to play it safe and tighten their criteria even further in a bid to balance the books.
According to their research, the volume of low-deposit mortgage deals for borrowers has changed drastically in recent months with 90% loan to value (LTV) products falling from 779 deals at the start of March to around 60 six months later.
The stricter lending criteria is largely fuelled by fears of defaults, with some larger lenders stating that they would not currently consider applications from people still on furlough and who did not have a confirmed date to return to work.
But it’s not just first-time buyers who are feeling the pressure at the moment, the self-employed are also being asked for more information, including bank statements and accounts, when they apply for a mortgage.
Despite the widely publicised uptick in post-lockdown mortgage lending, many in the industry believe that it could be short-lived with an end to the mini-boom caused by mounting job losses and stretched finances as government support is gradually withdrawn.
Rachel Springall, from Moneyfacts said, “Product availability has plummeted since March when there were hundreds of deals to choose from. There are now very few. Those who had expected to get a foot onto the property ladder may now hold their plans, particularly if they only have a 5% deposit.”