The UK Mortgage Store News

December 2009 Newsletter – The Future is looking Brighter

As we reach the end of what has been another testing year for the mortgage market the future is looking decidedly brighter for 2010.

Throughout recent months we have continued to see gradual market improvements and house prices beginning to stabilise, leading to greater optimism in the housing market. Recently Halifax reported that house prices have gone up for the fifth month in row, rising by 1.4% in November and pushing the cost of the average UK home to £167,664. The average house price is now at a similar level to where it was in 2006 and according to the December Property Tracker survey from the Building Society Association (BSA) property prices will continue to rise a further 3% in 2010.

General housing market activity is picking up also, the number of buyers has risen to a 22-month high in October of this year, according to the Council of Mortgage Lenders. They recently reported that 55,300 mortgages were granted to buyers, which is the highest number since December 2007. This can be attributed to a number of factors including increased interest from buyers and mortgage lenders beginning to ease up on criteria and re-introduce mortgages at higher loan-to-values.

And we are finding that the number of different mortgage deals available has substantially increased over the past eight months. Moneyfacts.co.uk recently reported that there are 1,624 residential mortgages available, up from 1,209 in April 2009. The rise in available products not only means that there is greater choice for buyers but also that there is increased competition amongst mortgage lenders. This additional competition has helped to push some rates down and encourage lenders to lower their fees.

So what can we expect in 2010? No doubt market recovery will be a gradual process but the positive indicators are there that confidence is returning and there is an increased demand for property purchases.

We would like to take this opportunity to wish you a Happy Christmas and a Prosperous 2010

For further details or to arrange an interview please use our ‘Contact’ Page.

For a PDF version of this newsletter please click the PDF icon:

July 2009 Newsletter – Fixed Mortgage Rates Rising

There has been a surge in the number of borrowers choosing fixed rate mortgage deals over recent months, with the Council of Mortgage Lenders (CML) reporting that 69% of borrowers took out a fixed rate product in April 2009. With mortgage rates having plummeted throughout 2009 it is not surprising that fixed rate loans have become increasingly attractive. However it looks as if we could now be coming to the end of this low rate period and are beginning to see rates creep upwards.

Since the beginning of June the average five-year fixed rate mortgage increased by 0.41% and many lenders have started to re-price the fixed rate deals they have available. Both Nationwide and Abbey have already raised fixed rate costs and we can expect to see others follow suit over the coming weeks.
So why are rates increasing? This can be attributed to ‘swap rates.’ Swap rates are the borrowing rates between financial institutions and play a huge part in determining the cost of fixed rate lending for banks and borrowers. We have recently seen two-year swap rates increase from 1.86% to 2.37%, which is one of the biggest single one-day increases in ten years. There have been even more dramatic rises to five year rates.

So who sets these swap rates and why are they increasing? Swap rates are set by the money market, who are concerned about the sums the government will continue to borrow over the next few years. Therefore the higher the demand for this extra cash, the higher the price – which in this case is the interest rate. This in turn feeds through to borrowing costs and pushes up fixed-rate costs everywhere.

And while we may not be able to predict the volatility of the money markets without a crystal ball what we may see is that increases to interest rates could continue. That said there are still some incredibly competitive fixed rate deals still available and if you are in the market to remortgage or purchase there is still time to snap one up – but be quick as they won’t be around for ever! The Mortgage Store has access to a wide range of mortgage products, speak to us today to find out more.

For further details or to arrange an interview please use our ‘Contact’ Page.