Welcome drop in fixed-rate mortgages
Home owners enjoying a welcome break after four base rate rises in eight months are in line for more good news. Falling swap rates – the money-market rates that determine fixed-rate pricing – have led lenders to cut the cost of fixed loans.
Stroud & Swindon Building Society has launched a two-year fixed-rate mortgage at 4.79 per cent. Those with a home valued at less than £250,000 will pay £494 in arrangement fees. The fee rises to £594 for properties worth more than £250,000.
The two-year fix from Derbyshire Building Society charges interest at 4.8 per cent, while Yorkshire Building Society offers a three-year deal at 5.1 per cent for those moving house and 5.15 per cent for home owners who want to remortgage.
Britannia Building Society has cut the rate on its ten-year fix by a tenth of a percentage point to 5.49 per cent.
Is this, however, a good time to fix? David Hollingworth of mortgage broker London & Country thinks so. He says: ‘Hanging around on a gamble for a cheaper rate may not pay off, particularly for home owners on an expensive standard variable rate.’
Simon Tyler of broker Chase De Vere Mortgage Management agrees. ‘There will almost certainly be another interest rate rise this year,’ he says. ‘The cheap fixed rates launched in the past few days should be snapped up because they will not be around for long.’
Housing market slowdown continues
The average property price in the UK fell for the third consecutive time last month, according to figures released today by the National Association of Estate Agents (NAEA), as over three-quarters of estate agents confirmed that they believe prices have reached their peak. Asking prices were on average 1.3 per cent lower than in the previous month and the annual increase in house prices was 8.5 per cent, down from 10.3 per cent the previous month. In addition, 79.6 per cent of estate agents believe that house prices have reached their highest point and will now decline – excellent news for first-time buyers.
Some prospective buyers who have been holding off waiting for prices to hit their peak earlier in the year are now reacting to the slight drop in prices and re-entering the market. In addition, they are reacting to the slowdown and attempting to achieve further discounts, securing an average of 5.5 per cent off the asking price compared to average discounts of around three per cent earlier in the year.
NAEA president Richard Hair comments: ‘The steadying of prices has encouraged more buyers than is usual at the end of the summer and activity in general is high, although overpriced property attracts little interest. Prices are not going to crash but there may well be further small correction before normal service is resumed.’