Mortgage bulletin for week commencing Monday 9 September

Posted 9 September 2013 by Keith Osborne

Every week, we bring you the latest news from the UK's residential mortgage market: new mortgage products for homebuyers and investors, the latest rates and up-to-date market analysis.

UK house prices saw a slight rise last month, with more people entering the housing market for the first time helped by falling mortgage interest rates and lower unemployment. Prices rose by 0.6% in August, compared to July, continuing a trend that has seen prices rise by 1.4% in the last quarter, according to a leading building society.

Robert Gardner, chief economist at the Nationwide Building Society, says: "A number of factors appear to be contributing to the recent upturn in house price growth. Consumer confidence has increased significantly in recent months, thanks to further modest gains in employment and signs that the UK economy is finally gathering momentum. An improvement in the availability and a reduction in the cost of credit, is also enabling more people to take their first steps into the property market."

One lender reporting a surge in mortgage applications is the Norwich & Peterborough, with the number growing steadily over the summer, particularly in recent weeks. Norwich & Peterborough, part of The Yorkshire, offers a range of fixed-rate mortgages, including a 2.19% two-year fixed-rate deal for loans up to 65% loan-to- value (LTV), with a £295 product fee, and a 3.84% 10-year fixed-rate deal available up to 75% LTV with no product fee.

Norwich & Peterborough product manager Richard Barker, says: "Demand for our competitive fixed-rate deals has been consistent and our low-fee products have been particularly popular. A package of incentives with many of these products, such as free valuation and free legal fees or £200 cashback, make the deals even more attractive to home buyers or remortgagers wanting to keep down costs."

Metro Bank has announced reductions of up to 0.5% for its residential and buy-to-let mortgages. Their two-year fixed-rate product for residential customers at an LTV of 70% reduces from 2.99% to 2.49%, while the two-year tracker rate is set at 2.39%. For buy-to-let customers, the two-year fixed-rate mortgage is down to 3.19% at 65% LTV. The products are offered with free legal and valuation fees up to a maximum property value of £1m.

Clydesdale Bank and Yorkshire Bank have both launched a range of mortgages offering free arrangement fees. Available now, the banks are waiving arrangement fees for customers looking to buy a new home, refinance their existing mortgage or to switch their mortgage to Clydesdale Bank or Yorkshire Bank. The offers are expected to run until December and include two-year fixed-rate mortgages with 70% LTV at 2.49% rising to 4.29% for 90% LTV. Five-year fixed-rate deals range from 3.19% at 70% LTV to 5% at 90% LTV.

Andrew Pearce, retail director for Clydesdale and Yorkshire Banks, says: "We remain focused on offering a range of competitive products that meet the differing needs of our customers. Our fee-free mortgage offer is designed to help reduce some of the up-front costs of moving or switching your mortgage."

Nationwide is offering its first fixed-rate mortgage at under 2%. The building society's new 2.04% two-year fixed-rate deal for up to 60% LTV is available at 1.94% for existing Nationwide mortgage customers, both with a £900 product fee and a free standard valuation. The company has also reduced all of its two- and three-year tracker rate products by up to 0.15%, and all two-year fixed-rates available up to 70% LTV have reduced by 0.1%, while first-time buyers may benefit from a £500 discount on any applicable product fee.

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