View more on these topics

57 % residential mortgages on fixed rates, says L&G

Legal & General’s quarterly index has found that 57 per cent of residential mortgages were on fixed rates compared to just 35 per cent for buy to let.

It also found that average loan to value for residential mortgages is 66 per cent versus 76 per cent for BTL.

Average two year fixed rates were 5.87 per cent compared to 5.82 per cent for five year deals.

The data is based on over 28,000 applications over the past three months.

Director of housing Stephen Smith says: “More than half of the 28,000 mortgages through our mortgage club in the past quarter were fixed rates, but there is a distinct difference in attitude to risk between residential and buy-to-let borrowers. Owner-occupiers continue to require the peace of mind that a fixed rate mortgage provides, whereas landlords feel more comfortable on variable rates. Many lenders had upped the margins on their tracker rates last year as a result of the well-publicised credit problems, making them less appealing to the borrower. They have clearly seen this as an opportunity to rebuild margins following erosion of mortgage profitability dues to a competitive market.

“If more residential borrowers had selected trackers rather than fixed rates over the past quarter then they would have benefited from the two recent base rate cuts. We would ordinarily expect to see the proportion of tracker rates rise considerably over the next quarter, however lenders have been reducing the discounts applied to trackers and in effect raising rates. Fixed rates are therefore likely to remain popular.”


Brokers face £625m hit on proc fees

Edeus is warning that the cre-dit crunch could see up to £625m wiped off the total income potential for mort- gage advisers.The firm has calculated a 31 per cent deficit in the amount of finance expected to be available to borrowers this year and believes this will result in a dramatic reduction in procuration fees.Gross […]

MetLife cuts annual fee for trustee plan clients

MetLife is reducing the ann- ual management charge of its trustee investment plan from 0.95 per cent to 0.5 per cent for all new and existing customers.MetLife moved into the UK market a year ago and says it is now aiming to expand further in the corporate market.Following the charge change, the company will offer […]

Newbuild starts plummet by 40%

Newbuild starts fell by 40 per cent in January.Assetz chief executive Stuart Law forecast at the debate that there would be 90,000 newbuild starts in 2008, against a Government target of 240,000.He said: “New build start-ups are imploding. We are down by 40 per cent in January year on year. We were at 260,000 in […]

Co-op offers extra commission on core funds

The Co-operative Investments is offering advisers an extra 1 per cent commission on investments made via Cofunds or FundsNetwork.The offer is valid on the The Co-operative Investment’s core UK fund range until the end of 30 April. The range includes Mike Fox’s Sustainable Leaders Trust, Andrew Moffat’s UK Income with Growth Trust and the UK […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm