Mortgage interest rises at rates drop
Mortgage brokers are expecting to see the first upturn in business from first-time buyers and home movers in 18 months.
However, data from the Intermediary Mortgage Lenders Association (IMLA) point to very modest growth, but it is hoped an upturn of 0.9 per cent in first-time buyer mortgage deals going through and of 0.7 per cent for home movers is a turning point.
The number of mortgage deals per office in May stood at ten, compared to 20 at the peak of the market.
Peter Williams, IMLA executive director, said: "We are not out of the woods yet but there are early tentative signs that the market is starting to return.
"While the level of growth is small, at less than one per cent, this is an important signal that confidence is beginning to pick up."
He added: "There is a modest improvement in mortgage availability and estate agents are starting to report a rise in property sales."
Pierre Williams, head of research at MoneyExpert.com, explained borrowers are starting to come out.
"Despite the low base rate some mortgages have remained ridiculously expensive," he said.
"But borrowers are borrowing again and that is tempting lenders to offer competitive rates."
He added borrowers still largely need to provide a hefty deposit, but lenders were coming out of their shells and softening their lending criteria.
MoneyExpert also reports interest rates on fixed-rate mortgages falling over the last three months - although they could be starting to swing back up.
The number of fixed-rate mortgage deals charging under four per cent has risen to 120 - from 55 in February.
The interest rate on the average fixed-rate mortgage deal has fallen from 5.37 per cent to 5.17 per cent over the last three months.
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