CONSISTENCY FOR 19 MONTHS

Rupert Swetman, a financial advisor with Mortgage Advice Bureau at Besley Hill Estate Agents’ Bedminster, Bishopston, Whitchurch and Bishopsworth offices, comments on the Bank of England’s decision to retain the Bank Base Rate at half of one per cent for the nineteenth consecutive month.
With the recent announcement concerning the planned changes to Child Benefit, other possible tax rises and with further significant reductions to public spending announced in the Spending Review, the public have got an insight into the impact that some of the changes are going to have on personal incomes.
This does not bode well for customers as almost everyone is likely to see some reduction in income. However, we continue to see a high degree of competition amongst lenders to attract those borrowers who are looking to either move home or remortgage.
The price of the average two-year fixed rate mortgage in October, as reported by Moneyfacts, has fallen again in the last month to 4.48%, down from 5.13% twelve months ago. Furthermore, the price of the average five-year fixed rate has also continued to reduce to 5.41% in October from 6.23% twelve months ago.
Fixed rates are not the only products in the market that have fallen; the price of the average two-year tracker deal has fallen back to 3.54% from 3.75% twelve months ago.
This demonstrates that lenders are attempting to encourage borrowers to enter into what are low rates in comparison with historic levels.
In addition to reducing mortgage interest rates, we have also witnessed a further increase in the number of mortgage products typically available to brokers with product numbers rising to 4,913 in the first week of October. This is a marked turnaround from twelve months ago when product numbers were less than half this level and a post “credit crunch” high.
Until the public are in a position to fully assess the impact of the Spending Review from a personal perspective, we envisage that fixed rates will be the main choice of product for borrowers because of the certainty they provide in helping stabilise household budgets in times of wider economic uncertainty.
*For further information on how the latest base rate decision affects you, call Rupert Swetman on 07773786004, email him on ruperts@mab.org.uk or contact your local Besley Hill Estate Agents office.