Mortgages Direct’s monthly survey revealed the number of borrowers opting for five-year fixed rate deals has increased from 20 per cent in October to 26 per cent in November; over a quarter of all mortgages arranged. The total percentage of fixed rate mortgages taken out was 97 per cent, with 3 per cent of borrowers choosing variable mortgages.
Peter Gladdy, director of Mortgages Direct, commented: “Homeowners were anxious to secure a fixed rate mortgage for a longer period of five years in November as interest rates increased for the second time this year and borrowers became alarmed about further imminent rate rises.”
Mortgages Direct’s survey also revealed that there was an increase in non-conforming business in November, with 18 per cent of borrowers opting for these mortgages compared to 13 per cent in October. Mortgages Direct said this trend is likely to continue in the run up to Christmas and into the New Year as homeowners opt to consolidate their debts following a period of overspending.
The level of first-time buyers remained low in November at 32 per cent.
Gladdy commented: “First-time buyers are often the most sensitive to a rise in interest rates and are still finding it increasingly difficult to get onto the property ladder. This low level of first-time buyers is worrying as housing market activity is dependent on the influence of first-time buyers. If the level of first-time buyers drops down further, the market will experience a slowdown. The housing market is not strong enough to justify a rise in rates.”
