Good news for borrowers as lenders keen to attract new business
The Bank of England’s quarterly Credit Conditions survey reports that mortgages were more readily available in the final quarter of last year, with lenders eager to meet year-end targets. With transaction levels subdued as would-be buyers and sellers prevaricated over making decisions with Brexit looming large in the background, the need to do more lending was ever more apparent.
Lenders reported that demand from borrowers fell in the final quarter, a trend expected to continue into this quarter. This may be to do with the uncertainty that continues around the Brexit negotiations but on the ground we’ve seen more positivity since the General Election. Demand for remortgaging increased, however, in the final quarter with borrowers taking advantage of cheap five-year fixed-rate mortgages in particular as a hedge against all the uncertainty.
Lenders’ margins have inevitably tightened as they have continued to compete on rate to bring in business. This trend is expected to continue into this quarter, which is great news for borrowers. Barclays, Halifax and Skipton Building Society have already reduced rates this year, a trend likely to be followed by other lenders.
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