The number of residential mortgage products has increased for the third consecutive month to 2,893, according to Moneyfacts.

This is the highest total availability recorded since April 2020 (3,192) as the impact of the pandemic was beginning to be felt.

The largest monthly growth in availability was at 90% loan-to-value (LTV), where the number of products almost doubled, increasing by 72 to 160, the highest recorded since June 2020. Furthermore, those with higher levels of equity or deposit have also seen an improvement; at 75% LTV, availability rose to 629 deals, the highest level seen since July 2020.

The average two-year fixed rate for all LTVs increased for the sixth consecutive month, rising by 0.03% to 2.52% – the highest this rate has been since January 2019 when it was also 2.52%. This is now 0.08% higher year-on-year and is an increase of 0.53% compared to the record low of July 2020.

The equivalent five-year average fixed rate also increased this month. However, at 2.71%, this remains lower than the 2.74% seen this time last year, but is still a rise of 0.46% compared to the low of July.

Eleanor Williams, finance expert at Moneyfacts, said: “The UK property market remained unseasonably buoyant in the lead up to the New Year, where, perhaps bolstered by the increase in product availability over recent months supporting demand from borrowers, the latest Bank of England data recorded that house purchase approvals had rocketed to the highest level seen since August 2007.

“Following the sharp drop off in availability in 2020, it is positive to see that we are beginning 2021 with the total number of mortgage deals rising for the third consecutive month. With 111 more deals on offer this month, at 2,893 this is the highest we have seen since April 2020, when the sector experienced mass product withdrawals as the impact of Coronavirus and subsequent base rate cuts began to be felt.

“This month also saw further positive movements at the higher end of the LTV spectrum, with the number of products for those looking to secure a deal at 90% LTV nearly doubling to 160, and at 85% LTV increasing by 43 to 439. As more lenders have returned to these higher LTV tiers, there is greater choice for those borrowers with lower levels of deposit or equity, who spent much of last year with so few options available to them. Furthermore, this has also extended to those who have higher levels of deposit or equity, who may be pleased to note that in the 75% and 80% LTV tiers we have also recorded increased availability, with both brackets now offering the most products they have since July.

“Not only is the increase in product choice a positive for borrowers, but it seems that a measure of competition may have started to return to some sectors as well. At the higher end of the LTV tiers, both the average two and five-year fixed rate deals for those looking to secure a mortgage at 90% LTV saw the largest monthly reductions, dropping by 0.14% and 0.13% respectively this month, while the equivalent rates at 85% dropped by 0.05% and 0.06% respectively, indicating that lender confidence may be returning to this part of the market, despite the still uncertain economic outlook.

“However, not all LTV tiers saw rates fall this month, which has resulted in the overall two-year average rate continuing its march upwards for the sixth consecutive month. At 2.52%, this is 0.08% above where this rate sat this time last year and equals the high this rate last reached in January 2019. Those who are interested in the slightly longer-term stability of a five-year fixed rate deal may notice that this rate, while rising by 0.02% this month, at 2.71% remains 0.03% down year-on-year. Those who are considering securing a new mortgage may feel motivated to explore their options now, before rates potentially increase further.

“This improvement in options for mortgage borrowers has occurred at a time when high levels of borrower demand have been fuelled by those hoping to benefit from the stamp duty holiday and by those who re-evaluated what they want from a home and were part of the unleashed demand that arose after the first lockdown in 2020. As we navigate our way through another period of restrictions, this time the property market is expected to remain open for business. However, with timescales for processing mortgages potentially subject to delays, and with the average shelf life for mortgages remaining at just 28 days, it has possibly never been more vital to call upon the knowledge and help of a qualified adviser to progress any applications and explore what may be the best option for their circumstances.”