Thu 22 May 2008
Mortgage market eases
There have been encouraging signs in the mortgage market over the past week, as numerous banks began to relax their lending criteria.The Abbey has reduced all flexible and tracker rates by 0.05%, while new borrowers are seeing fixed rate deals being cut by up to 0.17% – provided that they have a 25% deposit.
The bank announced that the cuts had been made in anticipation of its own borrowing costs being reduced. “This reduction anticipates future falls in Libor rates and will further support the Bank of England’s action in helping to bring liquidity to the mortgage market,” said a spokesperson for Abbey.
The Nationwide building society has also cut some of its fixed rate loans for new customers by 0.3%, while First Direct has begun offering mortgages to new customers once again after a six-week moratorium.
However the parent company of First Direct, HSBC, is taking a large share of the new mortgage market through its competitive ‘rate matcher’ offer. The bank, which is offering the deal until the end of June, has seen four times the amount of normal enquiries as a direct result of the offer.
Meanwhile HBOS, which accounts for a fifth of all UK mortgages, has completed its first securitisation since the credit crunch hit last year. It raised £500m in the wholesale money markets at 85 basis points above the current Libor rate.
A credit strategist at Deutsche Bank, Jim Reid, said: “This is a further sign that the actual credit crisis is easing.”
Posted by Marc Da-Silva
in Abbey, Bank of England, Deutsche Bank, First Direct, HBOS, Nationwide, News on Thu 22 May 2008
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