Economy rests on Rooney’s foot
Speaking at the Manchester Mortgage Business Expo, Barry Naisbitt, chief economist for Abbey, said: “It’s not impossible that there could be a temporary disruption to the housing market because of the World Cup. New buyer enquiries are increasing, but at a slower rate. It is not driving forward in the way it used to.”
Naisbitt expects there is a positive outlook for a soft landing in the housing market, but he said the state of the economy was difficult to predict through factors like the fluctuation in energy prices and consumer spending for the World Cup.
“The devil in the weeks to come is the World Cup,” Naisbitt said. “There may be good retail sales, but from an economists point of view it makes it hard to read the figures.”
With people buying up flat screen TVs to watch the games on, it could well be the results of Wayne Rooney’s foot scan that sees consumers buying more or returning TVs en masse, so creating havoc with retail figures.
Meanwhile, Abbey has launched a two-year tracker mortgage at 4.38 per cent (Base Rate minus 0.12 per cent). With a booking fee of £699 and a maximum loan of £500,000, this mortgage is available up to 90 per cent loan-to-value.
This rate is now Abbey’s lowest two-year tracker. It allows remortgagers and movers faced with rising fixed rates to keep their monthly payments as low as possible. At 0.46 per cent cheaper than Abbey’s current cheapest two-year fixed rate, the two-yyear tracker is a very good deal.
Barry Naisbitt, chief economist at Abbey, said: “There has been a marked change in financial markets in recent weeks which has meant that many lenders have increased their fixed rate mortgages. If people are planning to move house or buying for the first time, it may now be worth considering a tracker mortgage. The reason is that tracker rates are now lower than fixed rates in many cases. Even if the Bank of England increased Base Rate a couple of times in the next two years, a tracker is still likely to work out cheaper as previous interest rate movements have been just 0.25 per cent each time.
“Abbey’s new two-year tracker mortgage tracks at Bank of England base rate minus 0.12 per cent, currently 4.38 per cent, it then changes to our standard variable rate, currently 6.50 per cent for the remainder of the mortgage. The overall cost for comparison is 6.3 per cent APR.
“So, at 4.38 per cent this is well below the current Bank of England base rate of 4.50 per cent and it should be popular with customers who are seeking a low rate at the early stage of their mortgage.
“For people who move house regularly or who remortgage regularly in order to get the best deals, there are also tracker mortgages which track the Base Rate for the duration of the mortgage. These may appear slightly more expensive initially but work out cheaper in the long run. There are mortgages like this in the market which also have a savings offset facilities which allow people to pay off the mortgage early without penalty.”