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Rate cuts signal cautious optimism
A glimmer of hope entered the mortgage lending market this week as some lenders lowered their rates. Northern Rock, Abbey and Halifax have all made small cuts to some of their mortgage deals. Halifax have offered lowered product transfer rates starting from 5.99 per cent on 2 and 3 year trackers and 6.19 for 2 or 3 year fixed rates deals. C&G, Nationwide and HSCBC have all made cuts to their rates recently.
Abbey and Northern Rock announced cuts on their fixed rate mortgages. The average two year fixed rate for a mortgage has dropped from 6.92 per cent to 6.43 per cent. Northern Rock announced that it had made a loss of £585 million in the first 6 month of this year, last year it made a profit of £300 million during the same period.
Estate agents are struggling to sell properties and recent figures showed that on average agents are selling only one per week, causing thousands of offices to close around the country. The situation is made harder for estate agents as home buyers are required to have at least 20 per cent deposits for new builds and the cheaper rates are only available to those with at least a 40 per cent deposit.
Experts in the finance industry believe that the worst of the credit crunch may be over although the recovery could take some time with a slow but steadily increase in mortgage products available to consumers.
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