House Prices
Mortgage wars have resulted in the first sub 2% five-year mortgageReuters

Mortgage lenders have become increasingly competitive in recent years and are now more willing to lend to individuals who lack substantial savings, according to brokers.

For years, the best deals were only available to those who could afford a big deposit but the market has already begun to change, according to lenders.

HSBC last week announced the UK's first five-year fixed rate mortgage under 2%, widely described as the cheapest deal of its kind.

The HSBC mortgage, which comes at a rate of 1.99%, has a £1,499 fee attached, which is around a 40% deposit.

The battle between lenders has become so intense that experts are describing the current competition as 'mortgage wars,' as rivals compete to drum up business following a relatively quiet period of demand.

The Bank of England reported demand for new mortgages had fallen in the first quarter of the year, exacerbating a trend that began in the summer of 2014.

Reassured by record-low interest rates, which are widely expected to remain at 0.5% until the middle of next year at least, lenders are happier to offer low long-term fixed rate mortgages.

While this appears to be good news for first time homebuyers in the UK the current deals still come with significant fees and affordability checks. In fact, property website Rightmove reported the average price of new homes on the market had reached £286,000, an all-time high.