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Fixed rate the UK mortgage market golden child

Date: Wed, 05 Oct 2005

Fixed rate mortgages are becoming increasingly popular in the UK housing market as lenders continue to compete for customers.

According to the latest Bradford & Bingley quarterly Mortgage Market Review, lenders are continuing to push a number of low rate deals in order to attract new borrowers and boost flagging sales.

A number of high-street mortgage providers such as Halifax, Nationwide and Alliance & Leicester are involved in a so-called "rate-war" in a bid to remain competitive. The result is that many lenders are choosing a fixed rate product above a tracker or variable mortgage.

"Although many borrowers on tracker products are benefiting from the recent reduction in base rate, the majority of lenders had already priced this quarter point cut into their selection of fixed products making them equally competitive," said the Bradford & Bingley report.

The report added that the next few months of the housing market are likely to be influenced heavily by consumer spending levels over the festive period and whether the Bank of England will be forced to consider reducing the interest rate again.


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