As fears about inflation ease so does the prospect of an imminent rise in interest rates & the summer property buying season starts off with a bang as lenders compete for our business.

A t last there is some long overdue good news for borrowers as lenders have been cutting their rates in response to the receding threat of  a rise in interest rates. Lenders hoping to attract home buyers that may be looking to remortgage, as well first time buyers with large enough deposits have been reducing both fixed rate & tracker mortgages. A rate rise is not expected now ‘til August at the earliest & is likely any rises will be gradual & remain low.

Chief economist at IHS Global Insight – Howard Archer – said: “We expect the Bank of England to delay raising interest rates from 0.5% to 0.75% until August, given the major uncertainties and concerns about the underlying strength of the UK economy and its ability to withstand the fiscal squeeze that really kicked in at the start of April. Also, most monetary policy committee members are still reluctant to hike interest rates due to concerns and uncertainties over the growth outlook.”

“We see interest rates only rising to 2% by the end of 2012,” he said.

Woolwich – part of Barclays – & Skipton both reduced their rates towards the end of April, with Skipton including some fixed-rate mortgages at 90% loan-to-value.

Kris Brewster – Skipton’s head of products – said: “We’re continuing to provide borrowers with competitive mortgages designed to help them achieve their home ownership aspirations despite continued economic and market challenges.

“These new products follow a number of innovations over the past year which have made Skipton one of the only providers offering low-deposit mortgages to first and next-time buyers.”

Ray Boulger of independent mortgage broker John Charcol said: “There’s a strong chance we will see the cheapest five-year fixed-rate deals soon go below 4%, which we haven’t seen for months. The big rise in mortgage rates amid forecasts the base rate would go up quickly is now in reverse.”

However Andy Gray – head of mortgages for Barclays – saw things differently saying: “Many mortgage borrowers breathed easy this month when the base rate didn’t go up, so now they need to take action to start protecting themselves for at least the next two years.”

The latest item of positive news for borrowers comes from HSBC who have announced that they are dropping all the fees charged on their whole range of tracker mortgages – that includes booking fees, standard valuation fees & completion fees. In addition customers will be allowed to switch to a fixed rate deal at no extra charge.

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