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Lenders pulling fixed deals as rate fears hit home

Lenders have begun pulling their fixed rate deals amid speculation of another base rate rise in May.

Alliance & Leicester, Northern Rock and Portman have all pulled deals this year, while Halifax is expected to re-price shortly.

The moves come after inflation hit 3.1 per cent in March, with many economists expecting a rate rise from the current 5.25 per cent next month to help cool inflation. head of mortgages Louise Cuming says: “It may seem like a rash decision to remove fixed rate deals from the market, but it probably would have happened anyway. Tuesday’s inflation announcement has simply brought it forward a few weeks.

“Fixed rates have to be the best advice for first-time buyers because many have to borrow to their upper limits. Now those fixed rate products have been withdrawn we can expect lenders will soon announce a raft of new deals with increased fixed rates. This will surely impact on first-time buyers and, in turn, the market. In light of this, people might also begin to think twice about moving. It’s hard to see how the market won’t come to a standstill.”


Leeds launches options bond with NU

Leeds Building Society has launched a new product paying 9 per cent, investing 60 per cent in Norwich Union’s portfolio and 40 per cent in the Leeds options bond. The bond is designed to offer potential stock market growth combined with guaranteed interest. It has a minimum investment in the NU part of £5,000, so […]

BSA lending doubles in Q1, says BSA

Lending by building societies doubled in the first quarter of 2007, with gross advances totaling £5.47bn in March, says the Building Societies Association. Last year’s figure was £4.2bn for the same period while net advances were £1.85bn in March 2007, versus £815m in March 2006.Building societies had net receipts of £741m in March 2007, compared […]


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