This is their smallest market share since November 2008, and is a dramatic decline from their recent peak market share of 83.1% only 4 months ago in June, according to the John Charcol Index, the monthly mortgage activity monitor from John Charcol.
Commenting, Drew Wotherspoon of John Charcol said, "The roller coaster movement in product choice reflects the rapid change in mortgage pricing and interest rate sentiment over the last year. With the outlook for interest rates little changed over the last month an even higher proportion of borrowers chose a variable rate mortgage, in most cases a tracker.
“The Bank of England's announcement this month of an extension of the Quantitative Easing programme by a further £25 billion is another indication that Bank Rate in unlikely to rise in the next few months. Even if longer term fixed rates don't get much cheaper than those currently available at just under 5%, there seems a good prospect that borrowers on a variable rate will be able to benefit from rates more than 2% lower for the time being and then switch to a similarly priced fixed rate later."
John Charcol saw a further increase, albeit small, in the proportion of purchases last month, to 58.5%, the largest percentage since it started keeping records. First Time Buyer (FTB) activity as a percentage of total purchases showed a marked increase to 15.3%, up from 10.4% in September.
Wotherspoon said: “Although many potential FTBs are still shut out of the market because of the lack of an adequate deposit or failing to meet lenders' onerous credit score requirements for high LTV mortgages, several lenders have improved their pricing and availability of mortgages to 85% and 90% over the last month and so there are some encouraging signs for these would be FTBs."
