Lenders Battling to Offer
the Most Competitive Deals
The increase in base rate
has stifled any growth in the market. But it could spell good news for one
segment of first time buyers.
2018 looks set to be another tough year in the mortgage
market. Signs of economic growth last year stuttered when the Bank of England
increased the Base Rate. It might have been only a quarter of a percent, but
the message that it would not be the first increase was enough to provoke a
sense of caution among both buyers and those considering selling their homes.
The net result? The overall housing market has slowed again,
and mortgage brokers in
Essex have seen
a drop of around five percent in the overall number of mortgages approved
compared with the same time last year. As a result, they have also seen lenders
falling over one another to offer the best deal. This, however, is tempered by
a lack of owners taking the plunge and placing properties up for sale.
Good news for one sector
The one sector that looks to be coming out a winner is those
first time buyers who are looking to purchase a new build. With no chain in
either direction, the purchase process is at its simplest, and lenders are in fierce
competition with one another to offer them the best mortgage deal.
Look beyond the rate
Despite the slight increase in base rate, some lenders are
offering five-year fixed deals with rates as low as two percent for anyone who
can come up with a 15 percent deposit. Two year fixed rates are available at
1.9 percent with only a ten percent deposit needed.
Yet in the
super-competitive market, it is important to look deeper and not simply choose
the lowest interest rate. Factors such as cashback on completion, arrangement
fees and free valuations can mean that a 2.1 percent mortgage actually works
out cheaper than a 2.0 percent deal in the long run. Weigh up the options and
speak to a professional to be certain you are getting the best deal.