So as we are now in the summer season, it actually seems that despite predictions to the contrary, August has started pretty busily for many brokers around the UK from what I am hearing.
Of course a rate cut helps the phone to ring, but it is comforting that many of those seem to be committed to actually doing something which is great for everybody.
It was interesting to see the report from the Council of Mortgage Lenders stating that First Time Buyer activity is up 25% in June compared to a year ago and were at levels not seen for nine years. It was also the third month in a row that First Timer loans outnumbered loans to homeowners.
Meanwhile the effect of rate cuts has seen 10 Year Gilt Yields dropping below 0.6% for the first time ever and 3 month Libor has dropped dramatically to 0.38%. On top of this, Swap Rates have also fallen in the aftermath of last week’s rate cut.
We have had a plethora of lenders now cutting their rates in line with the fall in Bank Base which is of course to be expected but there are some lenders that already have reached the point where customers will not benefit any further as they have a collar, or floor, below which their rates cannot fall.
The good news is that we have already seen some lenders stress rates fall a touch and therefore affordability will improve on both residential and some BTL criteria too. In other words those who could only borrow a certain amount last week, van borrow that little bit extra now.
Rate wise borrowers can now get 2-year variable tracker rates from 1.24% (2.15% APRC), 2 year fixed rates at just 0.99% (3.56% APRC) and a 5-year fix from a mere 1.99% (3.28% APRC).
Buy to Let rates are now available from just 1.64% (4.89% APRC).