Archive for May, 2007

Bradford & Bingley, one of the major UK mortgage lenders, have announced a new ten-year fixed-rate mortgage.

Tim Anson, Head of standard mortgages at Bradford & Bingley, stated in a “climate of interest rate uncertainty”, longer term mortgages are becoming increasingly attractive amongst homebuyers from across Britain.

Tim Anson was also quoted as saying “Customers taking out a ten-year fixed-rate mortgage with us can benefit from peace of mind by locking into a great fixed-rate, while retaining the flexibility to move after five years if they need to without incurring any penalties,”.

The mortgage is available at a rate of 5.89 per cent with no arrangement fee or for customers borrowing between £25,001 and £75,000 they would benefit from a 5.69% interest rate, with an arrangement fee of £399.

Amounts borrowed between £75,001 and £1 million can obtain a 5.59% interest rate for a fee of £699, or a rate of 5.75 per cent with no arrangement fee.

According to companies such as Abbey, Barclays, HSBC, Sainsburys Bank, Alliance & Leicester, Mortgage Express, Standard Life and Northern Rock the property market is going to be buoyant in the near future.

This is supported by the fact that The Bank of England showed the number of new approved mortgages improved in January 2007.

The total amount of new mortgages that were approved increased by approximately 5% to 120,000, just under the average for June – December 2006.

These figures do support the argument that 3 increases in interest rates since Summer 2006 have not had a major lasting impact on the demand for mortgages and for house buying.

An expert from the Royal Institution of Chartered Surveyors, David Stubbs, said “The strong economic growth and rising employment, enjoyed by the UK at present, is supporting housing demand, even in the face of recent increases in interest rates.”

The mortgage market that encompasses buy-to-let mortgages is heading for a downturn experts at Standard Life.

The confidence of investors has been hit by higher interest rates than were anticipated and therefore they are now less likely to put their money into the property market.

An expert from Standard Life stated that rate rises since the summer of 2006 have led more potential investors to question if property is the correct area in which to invest their money.

The Standard Life survey suggests that investment in either one’s own home, or buy-to-let properties, has reduced from the levels enjoyed at the start of 2006.

Some experts from the main lenders such as Northern Rock, Abbey and Mortgage Express state that the rising cost of borrowing with a mortgage means that new buy-to-let investors may find the income from their properties does not cover their mortgage repayments.

However the Mortgage Lenders Council, show that 330,000 additional buy-to-let mortgages were taken out in 2006 – the highest for a decade.