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Interest Rate Update 30/4/2012
Current UK Interest Rate: 0.5%
UK Interest Rates Forecast: Rates likely to remain below historical averages
Is It Time To Reconsider Trackers?
The Bank of England's Monetary Policy Committee meets next week for its monthly rate-setting meeting. While the future of the quantitative easing programme may be up for discussion, on thing that is virtually certain not to change is the Bank Rate, which has been set at 0.5% for more than three years.
The prospect of a Bank Rate rise has gradually receded over the last year and now seems very unlikely in the near future. City analysts now expect the Bank Rate to remain unchanged until at least the end of 2013 – although such predictions are never entirely reliable.
Despite this, it could mean that tracker mortgages become more popular choices with home buyers once more. Tracker rates are currently looking very attractive, with the cheapest deals offering a rate of just 2.3% above the base rate, giving a current rate of 2.8%.
The other obvious alternative is a five-year tracker, which should give you fixed rate security beyond the point at which rates are expected to rise. The best five-year fixed deals currently offer rates around 3.6% - 4%, highlighting the extra cost of the security they provide.
Five-Year Fixed Rates Fall
The average rate on a five-year fixed rate deal has dropped from 5.59% 1 year ago to 4.86% today, according to new figures from MoneyFacts.co.uk.
Demand is likely to rise for these attractive fixed rates following the
SVR increases due to be implemented in May by many big lenders, as we
reported last week.
PREVIOUS UK MORTGAGE INTEREST RATE FORECASTS
House Price Update 30/4/2012
Current UK House Prices Situation: Price growth driven by south
UK House Prices Forecast: North-south divide likely to continue
House Prices Up 0.1% In April
The latest house price survey from Hometrack recorded an average house price increase of just 0.1% in April, down slightly from 0.2% in March. This leaves the annual rate of change at -0.9%, a marginal improvement on the -1% recorded in March.
London house prices saw an average increase of 0.3%, while house prices in the North of England fell and those in the Midlands remained unchanged.
Data for the Hometrack survey is collected through a questionnaire completed by estate agents covering every postcode in the UK, on the same day each month. Although it is not as precise as surveys using statistical data on house sales, the Hometrack survey provides a very fast and direct view of market conditions and does have a reasonably good track record of accuracy.
April's findings confirm what we have seen so far this year; that while price growth continues in London and the south east, weak house price performance elsewhere in the UK is pulling down the average and leaving it largely unchanged from month to month.
House Prices To Rise 3% In 2012
A new survey has suggested that house prices may rise by an average of 3% in 2012.
The latest Assetz house price survey – which combines the results of a number of other leading house price indices – found that house prices have increased by 3% since the end of 2011, thanks in part to a 30% surge in mortgage approvals in February, as buyers sought to do deals and complete before the end of the stamp duty holiday in March.
Commenting on the figures, Assetz chief executive Stuart Law said:
"We feel that our estimate of a 3 per cent rise in UK house
prices for the whole year of 2012, which was at the top of the range of
forecasts, could be comfortably achieved."
PREVIOUS UK HOUSE PRICE FORECASTS