Property investors urged to fix now to get the best deals

Time is running out for homeowners who are yet to fix, according to Ray Boulger of leading UK mortgage broker John Charcol, who has called upon consumers to make haste and secure the good deals that are still in existence.

Following another sharp rise in swap rates this week, fixed-rate mortgages are set to increase because the scale of the rise was large enough to send tremors in the market, the expert said.

Due to this development, a number of lenders may choose to increase the cost of some of their fixed-rate mortgages in the next few days, which underscores the need for consumers to fix now.

"If interest rates continue to rise then the current recovery in the housing market, which is based primarily on much improved affordability as a result of the combination of lower house prices and lower interest rates, may well wobble," said Mr Boulger.

"The message for borrowers wanting to take a fixed rate is clear; get in now or miss out on the current relatively low rates," added the financial expert, who revealed that around 80 per cent of the firm's clients are opting for a fixed-rate mortgage.

However, people still interested in tracker products should not despair because "there is no reason for lenders to increase tracker rates just yet", according to Mr Boulger, who explained that the three-month Libor is at an all-time low of 1.26 per cent.

This margin of just 0.76 per cent over the official bank rate is the lowest it has been for several months, he added.

"However, lenders with particularly competitive tracker rates may still increase them if they want to reduce the volume of applications they receive," he warned, using Woolwich, which is this week hiking the cost of one of its trackers, as an example.

Meanwhile, remortgage activity in the market is expected to perform well, according to Legal and General's director of housing Stephen Smith, who based his conclusion on recent research.

Some 25 per cent of advisers are bullish that activity in this sector will occupy around 20 per cent to 40 per cent of their operations, with some of them forecasting higher levels of house buying than at any time over the past 18 months.

"Our mortgage advisers are having a better quarter because they haven't been this confident since we started the index at the beginning of last year," he stated.

More than half of the advisers are confident business will improve in the next three months, with nearly one in five (18 per cent) saying that 60 per cent to 80 per cent of their mortgage business will be dominated by house purchase mortgages.

Their confidence stems from the fact that more evidence has been suggesting in recent weeks that the housing market is over the worst.

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