With analysts beginning to re-evaluate their predictions for movements in the Base Rate, and a reduction in the cost of funding (also known as swap rates) over recent weeks, there now appears to be scope for fixed rates to become even cheaper. Industry experts claimed in this weekend’s financial press that lenders already have a large appetite for business, and are expecting the launch of 5 year fixed rates under 2% before too long. The Mail on Sunday recommended that borrowers take advantage of such low rates by overpaying where possible to reduce debt at a faster rate.
This may not be the case in the Buy-to-Market however. Recent figures show house purchase approvals for investors increased by 21% between December and January, and 40% against January 2015. Mortgage brokers in the Times suggested that, as a result of this spike in activity, lenders may well increase rates in a bid to control volume.