UK Mortgage price war starts in 2015

UK house prices have certainly slowed down and according to popular tracking websites like Zoopla, they have dropped in many areas across England. The situation isn’t all bad, especially when you consider there’s a UK mortgage price war started in 2015 that will benefit consumers.

Building societies will be one of those not benefiting from the price war. This is due to trading being squeezed after restrictions on home loans and cheap wholesale funding adding to the pressure building societies are under.

Thanks to mortgage interest rates dropping over the past three months, mutually-owned lenders are losing new business and this has been confirmed by a new survey. Building societies cannot tap into wholesale markets like banks can and they are financed with deposits, so this has led to really low-rates for funding.

The mortgage price war in the UK is seen with bank rates down to 2.08% and this is improved on the 2.6% that we saw in summer 2014. Confidence in banks is increasing and has been for eighth quarters, also the business volumes are getting close to so-called “normal” levels.

Source: www.100mortgages.org