Building societies are dominating the mortgage best buy tables, offering 57.5 per cent of the most competitive deals despite taking around 21 per cent market share of gross mortgage lending, analysis by housing investment and shared equity mortgage provider Castle Trust shows.
Its analysis shows 23 out of 40 mortgage best buy deals across fixed, variable and buy-to-let deals are provided by building societies – nearly a third higher than the 18 out of 40 best buy deals offered by building societies in 2008.
Average rates on building society best buy mortgages are currently 3.4 per cent compared with 6.2 per cent in 2008 and lower than the 3.81 per cent in October 2012, when Funding for Lending started to take effect.
Building societies currently offering best buy deals include Marsden and Newbury for remortgages while Nottingham and Nationwide are competitive for fixed rates and Mansfield, Marsden, Hinckley & Rugby and National Counties are competitive for discounted rates. Coventry and Hinckley & Rugby also score well for variable rates.
Sean Oldfield, chief executive officer, Castle Trust said: “The competitive position of building societies as real contenders to the banks is clear and they are proving to be innovative and responsive to market conditions.
“Increased availability of funds through the Funding for Lending scheme is helping to boost the mortgage market as a whole but there remains a real need for further innovation to help unblock the housing market in support of Government schemes such as FirstBuy and HomeBuy.”
Castle Trust’s Partnership Mortgages are for 20 per cent of the value of an owner occupied home alongside a repayment mortgage of up to 60 per cent from a traditional lender and a deposit of at least 20 per cent. There are no monthly commitments on the Partnership Mortgage and Castle Trust will share 40 per cent of any profit made by the homeowner when they sell or at the end of the mortgage term. The company will also share 20 per cent of any the loss made on a home bought with a Partnership Mortgage.
Oldfield continues: “Many people, despite having good credit histories and sizeable deposits, are finding it difficult to secure mortgages. This is as a result of the banks’ desire to preserve capital. In the last five years, building societies have looked to offer a wide variety of innovative mortgage products that provide homeowners with a diverse range of financing options. Our Partnership Mortgage helps lenders overcome this issue so many more good quality customers can secure the mortgage they want.”
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