As we reported last week, several of the nation’s biggest lenders cut rates on their fixed mortgage deals. The average rate on a two-year fixed mortgage deal edged lower on Friday to 6.81% compared with 6.86% on Wednesday, according to Moneyfacts data.
It is still expected that the Bank of England will raise the base interest rate tomorrow on Thursday 3rd of August. But many analysts now expect the base rate to peak at 5.75% by the end of the year, believing that previous predictions of a 6.5% peak were overdone.
House prices fall at sharpest rate for 14 years
The reduction in interest rates coincides with new data published by Nationwide. The building society said house prices had dropped by 3.8% – the biggest decline since July 2009. With the average price of a home in the UK now at £260,828, which is around £13,000 below a peak in August last year.
We are seeing first-time buyers welcoming the drop in house prices, and with interest rates easing this could be a good time to secure a dream home.
Take Action
Remember to get in touch now if you have a fixed rate mortgage that is due to end within the next 6 months. Our brokers will be able to secure a rate switch within 6 months of your product expiring. And you won’t be locked in until the new deal starts.
This means we can continue to search the market to find you a better rate with your current lender or withdraw the application and resubmit with a new lender at a lower rate.
For mortgage help and advice please feel free to contact our team on 0208 364 3444 or click here to schedule a free consultation call.
UK mortgage approvals jump unexpectedly
UK mortgage approvals rose unexpectedly last month, despite borrowers being hit by rising interest rates.
New data from the Bank of England shows that net mortgage approvals for house purchases rose to 54,700 in June, up from 51,100 in May. Economists had expected a fall to around 49,000.
Approvals for remortgaging rose from 34,100 to 39,100, suggesting homeowners tried to nail down new deals before rates hit new highs.
The report also shows that net borrowing of mortgage debt by individuals rose by £100m in June, after people repaid £100m in May and made record high net repayments of £1.1bn in April.
Banks with lowest saving rates will face action
Banks offering unjustifiably low savings rates to their customers will face “robust action”.
The Financial Conduct Authority’s (FCA) warning came as part of a plan to ensure banks are passing on interest rate rises to savers. Under new rules that came into force on Monday, banks must prove they are offering their customers fair value.
The regulator has now set out a 14-point plan to make sure that interest rate rise are passed on to savers “appropriately”.
It says firms offering the lowest savings rates “will be required to justify by the end of August how those rates offer “fair value” or face action.