The report revealed two-year fixed rate business was up 13.04 per cent on July figures, representing 37 per cent of all mortgages sold by Hamptons International.
However, longer-term fixed rate deals dropped more than 15 per cent from the July findings and 16.51 per cent year on year to represent 7 per cent of all mortgages sold in August.
Hamptons attributed this to consumers who believed the recent Base Rate rise was a blip rather than a long-term pattern.
The rise in BBR led to a slight increase in best-buy mortgage rates. The best-buy two-year fixed deal now had a rate of 4.79 per cent as opposed to 4.69 per cent in July. The best five-year fixed mortgage deal was priced at 5.14 per cent, from 4.99 per cent.
Jonathan Cornell, technical director at Hamptons International Mortgages, commented: “Two-year fixed rates have performed fantastically this month as confident consumers decide to ride out what they view as a temporary Base Rate spike. A shortage of quality sales stock, coupled with high demand, and some cracking new deals out from major lenders such as Halifax, has meant the recent BBR increase has barely made the mortgage market pause for breath, much less put the brakes on. Any subsequent rate rises, anticipated by many before the end of the year, will need to be quite severe to halt the property price juggernaut.”
Rod Murdison, proprietor of Murdison & Browning, said: “I would agree that more people are choosing two-year deals, especially younger people who think the UK will join the euro. Gordon Brown has always said that we will join if the economic conditions are right and, of course, that will mean rates going down. Many customers will want to re-assess their mortgages in two years when there is a new Prime Minister in place. Two-year fixed rates will give customers that flexibility.”
