24 Nov 2024

A cautious return, but a competitive mortgage market is still far away

The past few days have seen a flurry of activity in the mortgage market, with some high profile lenders significantly reducing rates. The following lenders have all announced rate reductions over the past week:

Rate reductions during the first week of October 2009

Lender	Rates reduced
Abbey	Selected fixed rates reduced by up to 0.11%
Cheltenham & Gloucester	5 year fixed rate (via intermediaries only) reduced by 0.20% to 5.99%
Nationwide Building Society	Selected variable tracker rates reduced by up to 0.36% and selected fixed rates for 1 and 2 years reduced by up to 0.70%
Northern Rock	Selected rates reduced by up to 0.30%
Woolwich	Lifetime tracker rate reduced by 0.45% to 2.79%

Louise Holmes, spokesperson at Moneyfacts.co.uk commented: “Such positive steps certainly make for refreshing news and are a move forward from the barrage of criticism suffered by lenders over the past months.”

“As well as offering some hope to consumers who have struggled to find a decent mortgage rate, it also suggests that the banks and building societies may be launching products with a view to competition, after a lengthy period focusing solely on risk.”

“These changes are a step in the right direction with lenders cautiously dipping their toes back into competitive waters, however a full return to a competitive mortgage market is certainly a long way away off.

“Despite lowering rates, the loan to values for most of the products mentioned above remain around 70%, meaning borrowers still need to raise a large deposit to secure the top deals.”

“Lending is essentially based on risk alone at the moment, although it remains to be seen how long it will take for lenders to cut rates, whilst at the same time being a little more accommodating with their loan to values.”

Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.

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