Recent hiccups in UK borrowing costs have resulted in some widely diverse newspaper headlines. Two of these which have appeared in the past day or so certainly demonstrate this: “HOUSE PRICES SET TO FALL” said one “HOUSE PRICES ON THE RISE AGAIN”, said the other, from their places alongside each other on the newspaper stand. Taken as an average, then, the general opinion seems to be “NO CHANGE” – but who's to say?



On the face of it, there are those who argue that there are vast numbers of home-seeking immigrants arriving into the UK. Demand keeps prices up, so therefore prices should certainly not fall. On the other hand, banks are nervous of lending too much money on a property. They've been lending increasingly high percentages of money on property and the result is that there are lots of home owners with very little personal equity in their homes. If there is a slight depression in the market, even for the shortest time, then there is the possibility that if they were to default on payments, lenders would have to take the step of re-possessing the property and the hassle that this entails, for all involved.

However, maybe we should not worry too much – there are still lots of people clamouring to get on the housing ladder. The Government have indicated that they'd like to see some growth of products to encourage confidence in home ownership, including the availability of fixed rate long term loans over a period of 20 years or more. One of the major lenders is set to introduce a fixed rate 25 year loan at a competitive rate, aimed at first time buyers or home movers with long term mortgage needs. The last time the lender launched a similar plan it was completely subscribed in a matter of weeks.

It is hoped that the Government pledge of more house building and re-examining and extending the possibilities of shared equity schemes will help to keep things rolling too.

Whilst there are borrowers who are happy to shop around for the cheapest mortgage rates on shorter terms, there are those that will feel happiest fixing the rate so that, come what may, they have their mortgage payments fixed from day one. Those people who are operating at the limit of their financial constraints may also be wise to consider mortgage payment protection to cover themselves in the event of illness or redundancy affecting their income.

There are lots of mortgages available, and one of those attracting lots on interest is the flexible variety. They are particularly suitable for self employed people. With this product it's possible to under and overpay which gives much more control of the debt. Over-payment when a person is “in funds” will reduce the overall amount of interest paid and when things like the VAT are due, it's possible to balance things accordingly.

With the competition in the market, remember that the customer's interests are always in the thoughts of the lenders and they know that service and reliability are what really matters. There's a very big difference between the young first-time buyer looking for a one-bed roomed apartment and the investor with a well-filled portfolio of properties. Fortunately there are products to suit all borrowers, but not on a “one size fits all” basis.

Brokers are in the position of knowing which lenders are likely to be able to fit the needs of a specific borrower and by going on-line to find an independent broker, they'll be in a position to help you too. Get on-line and start to weigh up the options.