Weekly Update

Rate highlights:
Residential

3 year fixed rate @ 5.35%

Early Repayment Charge: 4% year 1, 3% year 2, 3% year 3.

Lender Arrangement Fee: £3,995 (can be added to the loan)

A good value fixed rates available for loans between £500k-1m and up to 75% LTV

BTL

Early Repayment Charge: 6% for 3 years

Lender Arrangement Fee: 2%

A low fixed rate to protect client’s cashflow now and for a further 3 years.

Consumer confidence has sunk to a 13 year low according to the index of confidence compiled by a leading survey group. This, coupled with evidence of a cooling housing market from both the Land Registry and Nationwide, has lead to 80% of economist polled forecasting a further 0.25% rate cut in May. The same economists are virtually unanimous in agreeing rates will be left on hold by the MPC on March 6th and the shadow MPC agrees with a 7-2 vote in favour of leaving rates at 5.25%

The cooling rather than “crashing” housing market and wider economy are reinforcing the view that, after one or two further cuts this year, the economy should be back on track in 2009 and inflation will again be the Bank of England’s main focus. With tracker rate margins continuing increase in the face of a 3 month LIBOR spread back up to 0.5%, there is an argument that fixed rates could be a smarter move in the medium to long term.

posted @ Monday, March 03, 2008 9:59 AM | Feedback (0) |