Mortgage news
INCREASE IN THE AVAILABILITY OF MORTGAGES
Dale Mortgage Brokers comments on a recent "Trends in Lending" report by the Bank of England and the Monetary Policy Committee's decision to maintain the bank base rate at half of one per cent.
"This is now the eighth consecutive month that the bank base rate has continued to stay at half of one percent and was fully anticipated by the market. The MPC have already effectively pumped £175bn into the UK economy to help it emerge from recession but the decision to provide a further £25bn suggests that this was necessary to kick start the economy further.
A recent report by the Bank of England on " Trends in Lending" commented that mortgage lenders expect an increase in the availability of mortgages in the last quarter of 2009 and we have seen some evidence of this emerge during the last month or so. The number of mortgage deals typically available to brokers by the beginning of November had risen every week for nine weeks, to the point where now there are approximately 2,600 products available. Although these are modest numbers in comparison to twelve months ago they do represent more than a 20% increase.
There has been some real competition emerging amongst the major lenders with almost weekly price adjustments being announced and these have almost all been reductions in rates. Several months ago the very best deals were largely for those borrowers requiring less than 60% of a properties purchase price or value, whereas with this element of competition there are now some very attractive rates at up to 70% and 75%.
Expectations are that the current 0.5% base rate looks set to stay static for some considerable time possibly until 2011 and only increase to 2% by 2012. This is reflected in recent mortgage borrowers' preference for an increase in the proportion of variable rate mortgage deals being arranged in the market. Last month we witnessed a significant reduction in the demand for fixed rates with around 55% of all mortgages arranged during October being fixed deals, down from almost 70% the previous month. This would appear to suggest that customers feel more confident that the low interest rates are likely to persist and is supported by a pickup in demand from first time buyers - the historic lifeblood of the housing market."
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