Mortgage market ‘starting to ease up’

The UK mortgage market is starting to ease up, it has been claimed.

Northern Rock’s decision to raise its highest loan-value (LTV) deals from 60 per cent to 70 pert cent is being cited as an example of this by head of mortgages at independent financial advisory firm Bestinvest Peter O’ Donovan.

He noted that a recent move by several lenders to trim their fixed-rate deals indicates that they are “looking for a bit more business”.

Mr O’ Donovan concluded: “It all does suggest that there is relaxation going on.”

However, the expert suggested that until there are a lot of 85-90 per cent LTV products on the market, there will not be a full-scale recovery in mortgage lending.

The next few months will see tracker mortgages becoming an increasingly popular option for homebuyers, it has been predicted.

Director of mortgages for Legal and General Ben Thompson said that the third quarter of this year has seen a fifth of those applying through the firm’s Mortgage Club going for such deals, compared with 12 per cent in the second.

The final three months of the year will see a further rise, he forecasted.

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