First time buyers have received some encouraging news, after figures from financial information service Moneyfacts revealed that mortgage availability is on the rise.
The number of mortgage deals currently available on the UK market has increased significantly over the last month and approvals are becoming more frequent as lenders continue to relax their acceptance criteria.
The figures show a 20% spike in deals from the beginning of 2010, with a number of mortgages now requiring a deposit of just 10% - a vast improvement compared to recent months.
The credit-crunch shook up the money market, causing instability in the lending sector, which proved to be particularly hard on first-time buyers, demanding large deposits in order to secure anything half decent in order to get on the property ladder.
Many fist time buyers were forced to turn to their parents for financial aid, although the debt risks associated with high loan-to-value deals have dropped.
Since October – at a time when 66% of deals on the market required a at least a 25% deposit, lenders have eased their lending criteria. This figure fell to 6% at the beginning of 2010, and down further to 58% at the start of February.
The availability of mortgages may have also been affected by the recent increases to property prices which has cut the amount of risk to lenders.
Recent figures indicate that there are now around 1,700 mortgage deals available - the highest number since November 2008. This suggests an increase in competition on the mortgage market
If lenders decide to raise the cost of their variable rate mortgages and single out deals to promote to the relevant audiences, for example those who are considering remortgaging a property, this trend could continue.
Darren Cook, of Moneyfacts said: "Better rates and an increase in appetite to lend could indicate that lenders are opening their doors just a little wider and trying to compete for business.
"If standard variable rates continue to rise, many customers will be forced to find a better deal elsewhere and lenders may now be wise and gearing towards the prospect."
Ray Boulger, of mortgage broker John Charcol, said: "It is a continuation of the trend we have seen for the last three or four months, none of the cuts have been massive, with lenders cutting a few selected rates rather than all of their rates.
"The reason for the trend is due to a bit more competition in the market. We will see a bit more activity in the market this year."
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