National Homebuyers: 'Lenders increase their rates'
There may be fewer buyers entering the market as lenders increase their rates in anticipation of a cut to the base rate of interest, spelling bad news for anyone seeking a fast property sale.
[UKPRwire, Tue Feb 12 2008] According to Moneyfacts, many lenders have increased the margins on their tracker-rate mortgages, as they expect an influx of borrowers.
It is widely anticipated that the Bank of England's Monetary Policy Committee will cut the base rate in February.
This is expected to lead to many people trying to secure a mortgage but lenders are increasing their rates in order to ensure that their margins remain high.
It is bad news for homeowners seeking a fast property sale as potential buyers are likely to be put off by the increased rates.
"In the last two weeks alone, analysis from Moneyfacts.co.uk has revealed that ten lenders have increased the margins on tracker mortgages by as much as 0.45 per cent," said Denise Harvey from Moneyfacts.
"These recent increases will impact prospective new borrowers. Take the example of a mortgage taken out in prior to January 17th with a rate of 6.29 per cent (BBR+0.79 per cent); the same deal is now available at 6.69 per cent (BBR+1.19%).
"Both rates will change by the same amount at the same time, but the borrower who delayed the decision to take out a tracker deal will always be paying 0.40 per cent more," she continued.
Fast property sale expert Julian King comments, "It's the lack of buyers that will directly affect homeowners who want to sell property fast.
"Fewer buyers means that there are fewer people to accept the asking price, meaning property values are determined by the buyer.
"Homeowners will also find that the length of time it takes to sell a property will increase to an unacceptable level".
Mr King is a director of National Homebuyers, the UK's leading quick home sale firm, guaranteeing a fast property sale for vendors who need a quick sale. The company is also the UK leaders in providing mortgage rescue schemes like 'Sell and Rent Back'.