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Market Watch

Swap rates closed slightly down last week.

One-year money is down 0.03% to 5.16%

Two-year money is down 0.04% to 5.16%

Three-year money is down 0.04% at 5.21%

Five-year money is down 0.07% to 5.25%

Lambeth launched an excellent three-year fixed rate at 5.10%. This follows its market-leading two-year fix at 4.85% which was pulled recently. Lambeth is going to be busy.

UCB tried a new tactic with its broker update which contained the headline: &#39Buy-to -let market begins to cool&#39 which was an interesting variation on most broker updates.

Northern Rock launched an excellent two-year fix at 4.88% available at a new 75% LTV band but the arrangement fee continues to grow, now standing at £695. Both GMAC-RFC and The Mortgage Works seem to be scrapping their non- status mortgages and replacing them with self-certs. Meanwhile Halifax launched a good two-year fix at 4.99% and a remortgage two-year tracker at 4.79%.

A good few lenders now have sub-5% two-year fixes – anyone with a rate above this seems out of touch.

Portman has a good five-year fixed rate at 5.39% but it is only available to £500,000.

The Woolwich is villain of the week for a couple of reasons. The first being service levels which are very poor recently. The second is its decision to divert its business development managers&#39 mobile phones to the broker helpdesk when they are switched off. The reason we call BDMs is that we want to speak to them.

Three-month LIBOR is unchanged at 4.95% and as the base rate is 4.75%, the City is expecting a 0.25% increase in the next three months. Twelve-month LIBOR is down 0.03% to 5.16% indicating a 0.50% increase in the next 12 months.

One report on the housing market shows house prices increased in July. This report from the Office of the Deputy Prime Minister reveals demand for larger properties pushed prices up by 2.1%. The average house price reached £177,474 in July, the report said, with annual inflation running at 14.3% – up from 13.9% in the year to June. The ODPM said detached properties led the way in July, with average prices rising by 3.2% over the month. The figures collated by the ODPM suffer a time-lag compared with some other market surveys. Meanwhile, Halifax and Nationwide both said the market slowed in August.

As the sun looks ready to set on the UK housing boom, global house prices are still rising at a dazzling pace, a report in The Economist reveals.

House prices are increasing at double digit rates in 11 of the 20 countries featured in the magazine&#39s latest quarterly global house price survey.

Hong Kong is top of the league with a 28.7% annual gain, followed by South Africa (25.5%) and New Zealand (22.1%).

The UK trails along in sixth place with a 13.8% gain, down from 17.6% in the previous survey. Home prices are now at record levels in relation to average incomes in the US, Australia, the UK, France, Ireland, Holland, New Zealand and Spain.

Jonathan Cornell is technical director at Hamptons International Mortgages

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