One-year money is down 0.05% at 4.88%
Two-year money is down 0.06% at 4.80%
Three-year money is down 0.07% at 4.81%
Five-year money is down 0.07% at 4.83%
Portman hangs on to the cheapest two-year fixed rate with its 4.69% deal. Birmingham Midshires has withdrawn its high balance products, but I doubt these would have seen much action recently while it has had products such as base rate less 0.51% and 0.75% available. Bank of Ireland has cut its fixed rates too and now has a three-year fixed rate at 4.99% which, coupled with its excellent service, looks good. Derbyshire has launched a great buy-to-let range, with a three-year fixed rate at 5.69% and a three-year tracker at 5.49%.
Hero of the week is Northern Rock for putting out a rate withdrawal notice for its 18-month fixed rate at 4.69% and its two-year 4.78% fixed rates.
Villain of the week is Halifax for changing its range and giving just two hours and 16 minutes notice to key in applications for the old ones. Ad-mittedly, it has not withdrawn any popular rates but it extended its tracker and fixed rate end dates which might cause problems for some clients.
Rate of the week is Abbey’s two-year tracker at 4.44% which is base rate less 0.31% which looks like great value.
Over in the City, three-month LIBOR is unchanged at 4.82%. The current base rate is 4.75%, so the City thinks there is less than a 50% chance of a 0.25% increase in the next three months. Meanwhile, 12-month LIBOR is down 0.01% to 4.91%, indicating the City thinks that base rate is likely to increase by 0.25% in the next 12 months. As widely expected the Bank of England
Monetary Policy Committee decided to keep interest rates on hold at 4.75% last week.
Doom and gloom remains over house prices after Halifax predicted prices will fall 2% next year, after nine years of gains. Halifax is the first major lender to predict prices will fall in 2005. By contrast Nationwide last week said it expects prices to grow by 2% in 2005. Halifax revealed that prices had dropped 0.4% in November, their second straight monthly drop, but that prices had risen 16.8% over the year, slightly down from last month’s figure of 18.5%.
At long last the Office of Fair Trading has decided that property searches will be investigated to protect homebuyers and speed up sales. The OFT will look at the cost and availability of information used in property searches carried out during the buying process. The information used in searches comes from local authorities, the Environment Agency and the Land Registry. The investigation follows complaints over the accuracy and cost of searches. Property search firms, that carry out conveyances on behalf of homebuyers, are behind the complaints made to the OFT.
Have a great Christmas and a happy new year.
Jonathan Cornell is technical director at Hamptons International Mortgages