Thrifty Loans

The Nationwide has followed other big mortgage lenders in increasing interest rates on new tracker mortgages by up to 0.2%. The country’s biggest building society is doing just the same as the Halifax, Abbey and Bank of Scotland have done recently. The impact of the global ‘credit crunch’ is slowly pushing up the cost of borrowing for all financial institutions.

The news of Nationwide’s increase in tracker mortgage rates came just after house price falls were announced for the East Midlands, the North-East, Wales, South-West and East of England by the Land Registry. London and the South-East still saw big increases in August, but the Registry predicted a slowdown for the whole market over the next six months.

Land Registry figures are based on actual completion prices. The average price for a house across the country was up 9.4% in the past year, to £182,914. London was the place for the most expensive properties, averaging £349,838. The cheapest average properties were found in the North-East with a price of £128,758.

From March to June an average of 99,736 homes were sold each month. In 2006, the figure was 106,090 for the same months.

It appears that higher interest rates are forcing buyers into a re-think, and they are edging out of the market. The credit crunch is driving would-be first-time buyers to sit and wait, as they try to find a lender willing to lend them money for more than 90% of a property’s value.

Nationwide commented that the increase in mortgage rates reflected the increase in the cost of borrowing money for the bank. Nationwide’s fixed rate deals were shaved by around 0.1% in many cases. The money used for fixed rate deals is borrowed at the swap rate, which is lower than the libor rate used for variable rate mortgage loans.

Related posts:

1. The South Pays Three Times As Much Stamp Duty As The North
2. Nationwide Tracker Rates Go Up
3. House Price Falls Expected To Hit Half The Country
4. House prices down in August
5. House prices still accelerating upwards