UK mortgage providers accused of opportunistic increases
Despite the fact that UK base rates have remained at record lows for six months the UK mortgage sector stands accused of opportunistic price increases. It has been revealed that the average two-year fixed-rate mortgage has increased from 4.84% in March 2009 to 5.15% this week. When you also consider that the average five-year deal has risen from 5.64% to 6.22% there really is cause for concern.
This comes at a time when the UK property market is starting to show signs of improvement but a lack of liquidity in the mortgage arena appears to be holding many people back. However, this has not stopped UK mortgage providers from increasing their profit margins although they will argue that money market rates have firmed over the last few weeks and ultimately finance is more expensive than it was six months ago. Whether this is the true overall picture remains to be seen but the fact is that UK base rates have remained at 0.5% for six months and yet mortgage providers continue to nudge their rates higher.
Many people are concerned that the ever increasing cost of a mortgage will in some way delay the inevitable housing market recovery and potentially impact upon the recovery of the whole UK economy.
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