Mortgage rates hit record low as 90% mortgages make comeback

Mortgage rates on tracker deals plummeted to a record low in January, providing a much-needed boost for borrowers and the housing market.

Figures out today from the Bank of England show that the average rate charged on tracker mortgages that have a 25 per cent deposit fell to 3.63 per cent in January, down from 3.92 per cent in December and the lowest rate recorded since comparable records began in 1997.

The rate on two-year fixed-rate deals also fell to a six-year low of 3.97 per cent, down from a high of 6.35 per cent in June 2008.

But while lenders are becoming keener to attract customers, borrowers with smaller deposits are still being forced to pay much higher rates.

The Bank stopped collating information on 95 per cent loan-to-value mortgages in 2008 as there were so few on the market. But there are signs that lenders are becoming more willing to lend to borrowers with smaller deposits, although there is unlikely to be a return to the abundance of 95, 100 and 125 per cent mortgages seen before the credit crunch.

The number of deals available to people who need to borrow up to 90 per cent of the value of their home jumped by 26 per cent in January, while Nationwide yesterday said that it was reducing the minimum deposit people needed to put down to qualify for its best rates from 40 per cent to 30 per cent on nearly half of its mortgage products.

Posted at 08:01PM Feb 09, 2010 by Kelly Board in Mortgages & Housing Market  |  Comments[0]

Construction Firms Face Difficult 2010

2010 is promising to be yet another tough year for the UK firms despite economic recovery with construction firms said to be the most vulnerable.  This is due to the expected end of the HMRCs ‘time to pay’ support scheme.

This comes according to insolvency company Begbies Traynor, who have said that the construction and public sector are most at risk and have also said that companies are ill prepared and don’t have the necessary finance available for the expected upswing in business.  Along with the withdrawal of government support measures, this may affect firms ability to cope.

Begbies’ ‘Red Flag Alert’ has reported its first year on year decline in the fourth quarter of 2009 after the number of companies with critical financial problems fell by 14% compared to Q4 in 2008.  Despite this, they are expecting a ‘significant relapse’ in the third quarter of this year as companies face the recovery.

The final quarter of 2009 saw over 140,000 companies falling into financial difficulty and the Red Flag Alert showed this was an increase of 6% on the third quarter.

“With tax and interest rates certain to rise, as well as increasing pressure on consumer spending, there is every reason to suggest that the insolvency peaks of this recession remain some way off,” said Ric Traynor, executive chairman.

Posted at 10:26AM Feb 09, 2010 by Marc Stenton in Insolvency  |  Comments[0]