Mortgage lending has soared to a record high as the housing market is on course for its busiest year since the global financial crisis.
Homeowners collectively borrowed £35.6bn in March, the highest level since Bank of England records began in 1993.
The strong borrowing was driven by people rushing to complete property purchases before the expected end of the stamp duty holiday on 31 March - although the Chancellor later extended the deadline.
Lending looks set to remain buoyant, with 82,700 mortgages approved for home purchases in March, 13% higher than a year earlier.
The number of people remortgaging was more subdued, with just 34,800 mortgages approved for homeowners switching to a different lender, although this figure is likely to reflect seasonal trends, rather than a lack of mortgage availability.
In fact, lenders are very much open for business, with availability increasing across all corners of the mortgage market.
Keen to know what this could mean for you? Here’s what the mortgage landscape looks like for different borrowers.
The number of mortgages available for first-time buyers has soared recently as banks and building societies flock back to lending to people with small deposits.
There are now nearly 200 different mortgages available for people with just a 5% deposit, up from only a handful at the beginning of the year.
The increase has been boosted by the launch of the 95% mortgage guarantee scheme, where the government ‘guarantees’ mortgages for buyers with 5% deposits.
But there is also a wide choice of mortgages available outside of the scheme, while renewed competition in this part of the mortgage market has led to a drop in average interest rates.
There has been a strong increase in the choice of mortgages available for people with a 10% deposit too, with the number of different deals soaring to nearly 500, compared with only 100 in the same period last year.
Meanwhile, the choice of mortgages for those with a 15% deposit has tripled, as recent strong house price growth has made lenders more confident about offering mortgages to people with small deposits.
But while the number of high loan-to-value mortgages - in other words, loans for people with small deposits - is on the rise, research suggests lenders are still picky about who they lend to.
A study by Aldermore found that only one in five first-time buyers were able to secure a mortgage on their first attempt, with the most common reasons for rejection being a poor credit history, not having a large enough deposit, not being on the electoral roll and being self-employed or having an irregular income.
The findings highlight the importance of taking steps to improve your credit worthiness before making a mortgage application to give yourself the best chance of success.
Homeowners moving up or down the property ladder currently have lots of choice, with the total number of mortgages available increasing every month so far this year.
There are now more than 4,000 deals on offer – 50% more than this time last year, bringing us close to pre-pandemic levels.
While existing homeowners typically have larger equity stakes in their home than first-time buyers, the greatest level of choice is no longer reserved for those with a deposit of 40% or more.
Instead, while there are more than 500 mortgages available for borrowers with a 40% deposit, the highest level of choice is for those with a 25% or 20% deposit, with more than 700 deals available in each tier.
And although average interest rates are holding steady, individual lenders are launching eye-catching deals as they look to win new business, with some offering rates of below 1%
However, the increase in competition has led to the average shelf-life of a mortgage – the time for which it is available before lenders withdraw it – falling to just 28 days.
As a result, borrowers will have to move quickly to secure a deal before it gets pulled by the lender.
Mortgage choice has also soared for buy-to-let investors, with nearly 2,500 different mortgages available to choose from. That's 1,000 more than last year - and more than there were in 2019 too.
A combination of strong house price growth, high tenant demand and rising rents, as seen in our Rental Market Report, has made lenders feel more confident about offering mortgages to investors with only small deposits, with 12 deals recently launched for people with just 15% to put down, ending a period in which the minimum deposit for buy-to-let was 20%.
There is also increased choice for people with a 20% deposit, with nearly 150 loans to choose from, compared with just 19 a year earlier.
Investors who have a 25% deposit have the most choice with nearly 900 mortgages available, more than double the number on offer 12 months ago.
There is more good news for landlords, as interest rates on buy-to-let mortgages have been on a steady downward trajectory since the start of the year, as competition in this sector of the market continues to hot up.
This trend has been seen across both two-year and five-year fixed rate deals and mortgages at all loan to value ratios, pushing average interest rates on two-year fixed rate products below 3%.