At the beginning of last year, the number of available home owner loan and mortgage deals from banks and building societies had fallen to the lowest level for many years and any new loan products which were introduced, were rather expensive and only offered a low loan to value.

Although things seemed to be improving throughout the course of the year, progress was particularly slow with no real improvement for potential borrowers. However, since December last year, the number of high loan to value products has jumped significantly, as lenders start to slowly ease their lending criteria on home owner loans.

The number of loan deals available at 85 per cent loan to value has increased by 22 per cent in the space of one month and 90 per cent deals has increased by 11 per cent. The figures come from the latest research conducted by moneysupermarket.com, who have not only noticed an improvement in loan to value ratios, but also that the average cost of a loan has fallen, as lenders increase their levels of competition. The average rate for an 80 per cent loan to value product has now reached 4.97 per cent, a reduction of 0.77 per cent since October last year.

Hannah Mercedes Skenfield of moneysupermarket.com commented on the figures, she said “Lenders seem to have started 2010 with their doors open and are clearly more open to mortgage lending than they have been for some time. The increase in products available at 85 per cent and 90 per cent is particularly encouraging for first time buyers, as scraping together a large deposit is not easy, and was the reason many prospective first time buyers deserted the market in their droves last year.”