The number of products at 90 per cent loan to value has shrunk to less than a tenth of the figure available pre-lockdown, analysis by Moneyfacts reveals.

The financial data firm and comparison website found that there were 779 residential deals for borrowers with a 10 per cent deposit in March before social distancing rules came into force, shutting down the market.

On Friday there were just 72 products on offer at 90 per cent LTV, a drop of 91 per cent. 

The number of deals at 95 per cent LTV fell by 96 per cent from 391 to just 14 over the same timeframe.

Overall, the total number of residential products available across all LTVs has almost halved from 5,222 in March to 2,748 on Friday.

Since the start of March 2020 through to today the average standard variable rate has reduced by 0.42 percentage points from 4.9 per cent to 4.48 per cent. 

Over this same time period the average two-year fixed rate has dropped by 0.45 points from 2.43 per cent to 1.98 per cent.

Meanwhile, the average five-year fixed deal has seen a cut of 0.51 points from 2.74 per cent to 2.23 per cent.

The difference between the average SVR and the average two-year fixed deal has widened slightly from 2.47 to 2.5 per cent.

Moneyfacts finance expert Eleanor William says: “Many households have suffered interruptions or reductions in their household income, and so as the first batch of consumers who took a three-month payment holiday from their mortgage see this come towards an end, they may wish to find out what the picture looks like now.

“Following the Bank of England’s decisions to cut the base rate twice in March, and this remaining at an unprecedented low of 0.10 per cent, average rates have fallen.”

Williams says that the fall in product numbers has been the most dramatic since Moneyfacts first began recording this data in 2011.

There was slight bounce back between the start of May and the beginning of June with 244 more products becoming available across the market, but the curve has not continued on a smooth upward trajectory.

Williams adds: “The recent product count fluctuations have been mainly focused around the higher-risk, higher LTV tiers which can be explained by a number of possible factors. 

“There has been an overwhelming level of demand from borrowers seeking products in these sectors, leading to some lenders who had relaunched offerings needing to pull them back to ensure their workload could be managed. 

“The potential for negative equity issues should house prices slump is now also a spectre. 

“This will be especially disappointing to first-time buyers where there are a limited number of products available to those with a smaller deposit at a time where savings rates fall to new lows.

“Lenders moving forward may need to assess how they intend to approach widespread extenuating circumstances and the risk these may bring to their lending decisions, such as gaps developing in household incomes and also other economic impacts that may directly affect the affordability of household borrowing.”