What the papers say- 17th and 18th October 2009

This weekend’s mortgage news focused on the recent Centre for Economics and Business Research forecast that interest rates will remain low for at least 2 years, with the Daily Telegraph, the Guardian and the Observer all discussing the impact this will have on a borrower’s decision over what rate to take. Experts suggest that lifetime trackers and some standard variable rates are very competitive at the moment depending on the amount of equity in the property, but all agree that personal budget is an important factor when making such a decision. This week’s FSA report also featured heavily in the financial press. The Financial Times and Independent on Sunday looked in particular at the expected ban on self certification mortgages and the effect this will have on self employed borrowers, many of whom will now have to delay applying for a mortgage until they can provide at least 2 years accounts to meet lender criteria. Experts warned against reactionary regulations such as limits on income multiples and loan to value caps, with some suggesting that lenders have so far focused their best rates on borrowers with large deposits. The Times picked up on this from a slightly different angle, pointing out that while large lenders are still risk averse, smaller building societies are coming back into the market and offering 90% mortgages to customers in the local area or who are members. Elsewhere prospective buyers were advised to act quickly in order to beat the stamp duty holiday which finishes at the end of this year, and there was news that the Post Office aims to become one of Britain’s top ten lenders, a move helped by their recent drop in interest rates and introduction of their first tracker mortgage.

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