Hobson's choice

According to recent analysis from Mortgage Brain there were 3,091 mortgage products available in the UK on 30th March 2009. On the face of it, with the news telling us that it's well nigh impossible to get a mortgage of any description, that seems like an enormous amount of choice and rather flies in the face of the general perception.

Let me tell you this, though - 3,091 mortgage products is *nothing*. This time last year there were in the region of 15,000 different mortgage products available offered by over a hundred lenders. It's a bit like walking into a newsagent for a television listings magazine and being faced with a binary choice of the Radio Times or the TV Times. Sure, you might decide to buy one of the two but for millions of people neither of those publications will be exactly what they want. And so it is with mortgages.

For years, the mortgage buying public have invariably been able to find what they wanted. It didn't matter on the "loan to value", the repayment method, whether you wanted a fixed or variable rate, whether you needed flexibility or not. There was a lender out there for everyone from the City professional to the newly self-employed with an impaired credit history.

Without wishing to pass judgement on any lenders individual lending policies - the debate about whether the lenders were reckless will endure - the fact remained that the sheer number and variety of products available meant that pretty much everyone could find what they wanted. Today that is palpably not the case and is resulting in millions of borrowers facing the stark situation where they may have two options available - no choice or Hobson's choice.

Until such a time as the number of products available to borrowers increases there will continue to be a situation where many mortgageholders (and potential buyers) are simply unable to find a product that satisfies their requirements. It needs lenders to innovate, to relax their criteria, to increase their "loan to value" ratios and, above all, to develop an appetite for helping the mortgage market get back on its feet. The short-term chances of anyone prepared to do that, however, are slim.