UK homemovers fix their mortgage rates as confidence remains fragile

Countrywide Mortgage Services

Tuesday, July 13, 2010

Countrywide's monthly mortgage market report - June 2010

The latest mortgage market figures indicate that 72 percent of all applications in June were for fixed mortgages as UK homemovers anticipate future rises, according to Countrywide, the UK's largest mortgage broker and property services Group.

The activities of Countrywide's 700 mortgage consultants reveal a huge shift in favour of fixed interest rate products, which have reached levels not seen since October 2009. The split between fixed and tracker applications has jumped 19 percent since January 2010, with a 7 percent increase in the last month alone.

The figures suggest that homemovers appear to be prepared to accept the higher interest rates that typically come with fixed rate mortgages.

Overall the average interest rates of Countrywide's Top 10 mortgages in the first six months of 2010 was 4.62 percent, a 0.67 percent decrease from the same period in 2009 when the average interest rate was 5.29%.

Remortgage customers are also opting for fixed rate products in 78 percent of mortgage applications - a 4 percent increase on the previous month and a 10 percent increase in Q2 2010 compared to Q1 2010.

Grenville Turner, Countrywide's Group Chief Executive said;

"Despite the Bank of England's best efforts to hold base rates at a record low of 0.5 percent, the mortgage market remains in an extremely fragile state. Overall mortgage approvals are up by 9 percent  [1] which sends a strong signal to the industry and lenders have also increased the volume of products available by 193 percent compared to June 09 [2], which provides some reassurance.

"The popularity of two year mortgages over longer-term products indicates that any nervousness over unemployment and government spending cuts is currently a short-term concern."

Grenville added: "The recent Bank of England Credit Conditions report revealed that lenders are becoming nervous about the cost of wholesale lending - if this transpires into the mortgage market through tightened lending criteria, we will see a significant impact that could damage any chance of a recovery in the property and mortgage markets."

Research highlights for June 2010 (based on the percentage of overall lending versus May 2010):

Countrywide's Most Sourced Mortgages are available to view on www.countrywidemortgages.co.uk or call 0800 988 7925 to arrange an appointment with a consultant.


 

[1]  Countrywide Mortgage Services: Mortgages offered  June 2010 v May 2010 

 [2] Countrywide Mortgage Services: number of available products for mortgage consultants via Mortgage Brain June 2010 V June 2009

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