The UK Mortgage Trends Treasury Report showed the number of residential mortgage products went up for the third consecutive month to 2,893.

This was the highest total availability Moneyfacts had recorded since April 2020 (3,192) when the pandemic’s effects were began to take hold.

However, the data for January 2021 showed the greater increase in availability was at 90% LTV where the number of products almost doubled, increasing by 72 to 160 – it’s the highest Moneyfacts has recorded since June 2020.

It said borrowers with higher levels of equity or deposit had also seen an improvement – indeed, at 75% LTV, availability rose to 629 deals, the highest level seen since July 2020.

Eleanor Williams, finance expert at Moneyfacts, said: “The UK property market remained unseasonably buoyant in the lead up to the New Year, where, perhaps bolstered by the increase in product availability over recent months supporting demand from borrowers, the latest Bank of England data recorded that house purchase approvals had rocketed to the highest level seen since August 2007.

“Following the sharp drop off in availability in 2020, it is positive to see that we are beginning 2021 with the total number of mortgage deals rising for the third consecutive month.

“With 111 more deals on offer this month, at 2,893 this is the highest we have seen since April 2020, when the sector experienced mass product withdrawals as the impact of Coronavirus and subsequent base rate cuts began to be felt.”

Rates

Moneyfacts’ data also revealed the average two-year fixed rate for all LTVs increased for the sixth consecutive month, rising by 0.03% to 2.52%. This is the highest this rate had been since January 2019 when it was also 2.52%.

This is now 0.08% higher year-on-year and is an increase of 0.53% compared to the record low of July 2020.

The equivalent five-year average fixed rate also increased this month. However, at 2.71%, this remained lower than the 2.74% seen this time last year.

However, rates in the 90% LTV tiers became more competitive and there were other areas where deals looked cheaper too.

Williams explained: “At the higher end of the LTV tiers, both the average two and five-year fixed rate deals for those looking to secure a mortgage at 90% LTV saw the largest monthly reductions, dropping by 0.14% and 0.13% respectively this month, while the equivalent rates at 85% dropped by 0.05% and 0.06% respectively, indicating that lender confidence may be returning to this part of the market, despite the still uncertain economic outlook.

“However, not all LTV tiers saw rates fall this month, which has resulted in the overall two-year average rate continuing its march upwards for the sixth consecutive month.”