Every Friday we take an overview of the mortgage market, hearing from industry voices and getting a round-up of the best rates courtesy of the independent experts at Moneyfactscompare.co.uk.
The most eye-catching news of the week, after months of mortgages rates sliding down, was a few lenders, notably Coventry and Co-operative Bank, withdrawing their lowest rates or announcing hikes.
The escalating conflict in the Middle East, which could affect oil prices and therefore inflation, is creating some uncertainty.
Moneyfacts finance expert Rachel Springall explains: “Over recent days we have seen a rise in swap rates. The uncertainties surrounding future interest rates, such as mixed messages from Bank of England regarding base rate, combined with wider economic uncertainties have their parts to play in lenders pricing decisions.
“Fixed mortgage rates typically follow swaps relatively closely, so any volatility can be an indicator on where rates will go next, but it may be a little too soon to tell how this could impact the market overall.”
One factor that could come into play – and potentially prevent hikes being too pronounced – is the timing of all this.
“Each lender will have their own end of year targets to consider and could choose to hold steadfast if they are not priced too low in the present market,” says Springall.
This is in line with what we saw with Barclays yesterday, with mainly small improvements to rates but some increases on selected products.
Overall, it’s not a time to be too panicked, says David Hollingworth, associate director at L&C Mortgages and Money blog regular.
“This isn’t anything like the kind of volatility that we have seen on occasions in the last couple of years,” he says.
“Rates aren’t likely to spin out of control and it’s more a case of understanding that what may have looked like continual cuts to rates may not maintain the same pace.
“Interest rates are still expected to fall and all eyes will be on the inflation data next week.”
This week, Moneyfacts has looked at the best rates on offer for home movers…
Moneyfacts also rounds up what it calls “best buys”, which look beyond the lowest rates and takes in incentives and fees…
Two other updates of note on the housing market were reported on here in Money. You can read them here…
