27 April 2009

Buy now, Fix now!

Not only is it a great time to buy, but remortgaging is becoming attractive too. There are some very competitive 3-10 year fixed rates available and the continued uncertainty in the financial markets is causing borrowers to review and stabilise outgoings longer term.

A few weeks back, I mentioned that fixed rates were set to increase and they are showing signs of doing so! Woolwich have increased their 3, 4 and 5 year fixed rates by up to 0.40% yet, at the same time, have reduced 2 year fixed and tracker rates by some 0.30%. Interesting, as general costs to lenders acquiring fixed rate monies (swap rates) had decreased! Yorkshire Building Society also increased fixed rates by 0.40% for loans exceeding 75% of property value. If this is the sign of things to come, then a trip to AToM in the very near future could be a financial masterstroke!

The Council of Mortgage Lenders estimates that 900,000 homes are in negative equity (house value lower than mortgage balance) and that prices have fallen around 16pc during the past year, although this figure might be open to question! Notwithstanding this, some lenders are showing a willingness to assist. Halifax and Bank of Scotland (members of Lloyds Banking Group) are offering 95% loans to selected remortgage customers and up to 120% of the property value in certain cases. You won’t find these schemes advertised as they are discreet offerings to existing customers. However, anything which helps stimulate the market is encouraging.

Halifax have also launched a scheme where they will pay 50% of your first years council tax bill (to £1,000) to attract first time buyers (available until 23/5/09 - conditions apply).

Continuing the “good news”, mortgage products now available increased to 3,700 in March, a 25% increase on February. And there’s more! Lombard Street Research declared that housing is now affordable and the slump will be over by Christmas!

And finally…The Confederation of British Industry (CBI) says. "The UK recession was more extreme than expected during the first three months of 2009, but the worst is now behind us. The recession is expected to last until the end of 2009 with sluggish growth resuming in Q2 2010. The Bank of England is expected to start raising the UK Bank Base Rate from its current 0.5% level in spring 2010.”

As I started, so will I finish…Buy now…Fix now!

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