lt's second report in the ‘Mortgage Purchase Index' series analyses trends from over 24,000 mortgage applications made in the last quarter. It found:
58% of buy-to-let mortgages were fixed vs. 35% in Q1
Average LTV for residential mortgages had fallen from 66% to 63%
Average LTV for buy-to-let mortgages has dropped more significantly - from 76% to 67%
Average 2 year fixed rate has risen from 5.87% to 6.51% from Q1 to Q2
Average 5 year fixed rate has risen from 5.82% to 6.34%
Average 10 year fixed rate has remained at 5.97%
Stephen Smith, Director of Housing at Legal & General said: "The price of fixed rates and petrol keeps going up and up, yet consumer appetite for both shows no sign of abating. There has been a huge jump in the number of homeowners opting for fixed rate mortgages despite the significant increase in rates, particularly for two and three year deals. It shows how risk averse the UK mortgage population is if we still prefer to choose certainty over value.
"Three quarters of the people that went through our Mortgage Club to get their residential mortgage chose a fixed rate compared to just over half three months ago. This is a significant shift, and is close to the highest proportion that we have ever seen. This coincides with a slight drop off in the average size of mortgage being lent versus property value. This suggests that people are putting up bigger deposits, particularly in the buy-to-let market, due to the decline in availability of higher LTV products."
