The housing market has been boosted by news that number of
homes sold in the UK rose by 40% in March.
Data from HM Revenue & Customs show that 60,000 properties changed hands during the month, compared to 43,000 in February.
While the news will no doubt raise hopes that the housing market slump may be easing, sales remain at lows not seen since the early 1970s.
Death of trackers?
In other news,
tracker mortgages are fast disappearing from the market as borrowers head for
fixed rate mortgages in their droves.
Data from broker John Charcol show that less than two in 10 (19%) mortgage applications this March were tracker deals, compared to more than seven in 10 (71%) last December.
Conversely, fixed deals have surged from 29% of mortgage applications to 81% during the same period.
Trackers far less attractive
While the cost of
fixed rate deals has fallen in recent months, this sharp shift has more to do with the relative unattractiveness of trackers.
As John Charcol head Ray Boulger points out, with the base rate having already fallen to 0.5% there is really only one way it can go.
Another important factor is that
trackers now charge anywhere up to 3% above base, whereas deals of just 0.5% where available late last year.
“This means that the risk of being locked into an expensive tracker mortgage when rates go up outweighs the fact that initially a fixed rate is a little more expensive,” says Boulger.
A third factor is that until recently there were no trackers available above 75% LTV, meaning that only borrowers with a 25% deposit can qualify.
