There are 2,282 mortgage products available today, compared to 5,040 this time last year, and down from 27,962 in 2007, according to market analysis by moneysupermarket.com.
People in the market for a mortgage will have a very different experience to those in the same boat in 2007, with a dramatic decline in the choice available.
Despite calls from the Government for mortgage lenders to increase the amount they lend, during the past two years borrowers have found it increasingly difficult to secure a competitive deal unless they have a significant deposit to hand, as wholesale money markets have dried up.
In the first time buyer mortgage market, deals are even more thin on the ground at just 1,195.
Compared to two years ago, when first time buyers could take their pick from a wide range of mortgages and borrow up to 125 per cent loan to value (LTV), they have been on the front line of the slump in the mortgage market, with limited credit histories and small or no deposits suddenly hindering their ambitions of homeownership.
Commenting on the sobering statistics, Louise Cuming, head of mortgages at moneysupermarket.com, said that "the lack of credit is an ongoing problem," despite various initiatives from the Government and the Bank of England to boost lending, such as the Asset Protection Scheme.
"This will continue to hinder any sustainable recovery in the housing market so until this changes, and more mortgages become available, house price growth will remain muted at best, with further falls possible, and many borrowers will struggle to get a mortgage," she said, and is pessimistic about the immediate future of the mortgage market:
"Unfortunately it is doubtful that the number of products will increase significantly any time soon. Lenders are competing to attract the same borrowers – those that are seen to offer the least risk to the bank - and there is no sign of this trend changing."
Meanwhile, new research from advice website Unbiased.co.uk, has suggested that many would-be homeowners believe they are unable to get a suitable mortgage due to lenders low income multiples.
After a decade of 'easy credit', tighter lending criteria has affected public opinion, Unbisased.co.uk claims, and perceptions of lending criteria and income multiples have worsened since the first quarter of 2009.
David Elms, chief executive of Unbiased.co.uk, said: "The mortgage market has been going through tremendous change over the past year and lending criteria certainly isn't what it used to be. There is a lot of consumer confusion out there. It is not surprising that many potential homeowners have taken a pessimistic view of lending criteria and what income multiples are available to them."
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