Demand for fixed rate mortgages falls back
Wed, 27 Apr 2011
The recent trend for sharp rises in the number of people seeking fixed rate mortgages went into reverse last month, new figures show.

According to mortgage adviser John Charcol, between September of last year and February of this year the proportion of its clients choosing a fixed rate deal more than doubled to make up 56 per cent of all mortgages by the end of February.

However, the firm says that a hike in prices means that this fell back to 49.9 per cent in March.

Ray Boulger, senior technical manager at John Charcol, said that this decline could continue as a number of factors - such as the weak economic recovery and a recent surprise fall in inflation - mean the Bank of England is likely to maintain interest rates at 0.5 per cent for some time.

"All this suggests the market is running ahead of itself in terms of the timing and speed of bank rate increases and we expect the take up of fixed rates to decline further until the best five-year rates fall back below four per cent to reduce the premium over variable rates to a more acceptable level," he said.
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