After last month’s 1.1% drop in house prices, asking prices have increased sharply this month.
This month’s House Price Index from Rightmove shows a rise of 3.1% on last month’s figures, the largest October increase for seven years. The company surveyed 105,769 new October sellers and discovered the average monthly increase was £7,082 more than in September.
Rightmove pointed out that this seems illogical and that sellers could be ruining their chance of a sale by increasing prices at a time when more properties are being put on the housing market. The average number of properties for sale in each estate agent’s branch rose from 69 last October to 78 this month.
Meanwhile, people who are looking for a mortgage will be carefully weighing up the various options. Do you go for a variable rate or tracker mortgage or choose a fixed rate product in case interest rates rise?
There’s no doubt that interest rates will not remain at their current low for ever; but when will they start to rise? Most analysts now agree that this will happen at some point next year and a few think it could happen in the Spring.
Fixed rate mortgages are becoming more popular as borrowers look for the protection afforded by regular monthly repayments. Mortgage lenders are responding to the demand and dropping the cost of a fixed rate product to as little as 3.69% over a five year term. However, the LTV on this deal from ING Direct is only 60% and the arrangement fee stands at £1,945.
Shopping around for a contractor mortgage at the moment is a bit of a gamble. Attempting to guess when interest rates will rise is a mug’s game and you should choose a mortgage that suits your circumstances, says one independent mortgage adviser.
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