Press Office

MORTGAGE MONITOR

At the time of writing, UK Base Rates have now been on hold since the July reduction from 4.75% to 4.50%, which has prompted many commentators to review whether they may now have actually reached a short-term low. The number of enquiries for house purchases has been rising steadily for the last four months, according to the Royal Institute of Chartered Surveyors, RICS, who survey this data each month. Other evidence released recently in the Halifax House Price Index suggests the rate of inflation in the housing market is now very similar to general inflation at 2.5% per annum. With the housing market now having slowed considerably, some commentators are predicting a benign period in advance of any renewed pick up in activity.

Nigel Pascoe, Director of Lending, Skipton Guernsey Limited comments, “The housing market conditions are the same in Guernsey with the winter months in the lead up to Christmas being traditionally very quiet. Spring, however, is often the time when house hunters start to look again in earnest at moving. If Base Rates are stable, this may give buyers the renewed confidence they need. Overall, Skipton Guernsey expects the housing market to move gently in the first quarter of 2006, but we would anticipate that prices remain firm through the second quarter.”

If rates have steadied in advance of any rise in the future, clients will want to choose mortgage products that protect them against increases in mortgage costs. A fixed rate loan will bring budgeting certainty, as rates will not rise during the period of the fixed rate term, even if Base Rates move upwards. Nigel Pascoe continues, “Skipton Guernsey has a comprehensive range of products to meet the needs to customers looking for both fixed or variable rate mortgages”.