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Mortgage rates fall

According to a CML survey of over 50 top lenders, average variable mortgage rates fell from 6.14% in October to 6.07 in November. This hot competition for custom amongst the financial institutions and the fact that there has been no rise in the interest base rate this year can only be good news for house hunters.

Fixed rates also fell from 6.41% to 6.25%. Variable rate mortgages increased in popularity, accounting for 69% of all loans - up 2% from October. First time buyers accounted for 43% of loans, borrowing an average of 2.3 times their income. Those already having owned a property accounted for the rest, borrowing less of the property's value (only 63% compared with first time buyers who generally borrow around 80%).

Coupled with this positive news was a healthy increase in the level of mortgage lending. Total lending rose to £10.4 billion, up from £9.9 billion in October although still down on this time last year. A massive £6.5 billion of all loans was for the purpose of house buying, equating to 63% of total borrowing and up from 62% in October.

As CML Deputy Director General Peter Williams commented, "The CML expects housing market stability to be one Christmas present that will last throughout 2001, and beyond. This is because the wider economy is expected to remain unusually stable by historic standards."