A record low mortgage rate is the latest sign of lenders battling for new custom, but experts say the small print of deals requires careful examination.
The latest figures from HM Revenue and Customs (HMRC) show that, on a seasonally-adjusted basis, property transactions have generally been close to the 100,000 mark each month for the last three years.
The exception was a surge to 173,860 in March last year, ahead of the introduction of a 3% stamp duty surcharge on the purchase of any additional buy-to-let properties or second homes.
Since that surcharge came in, the buy-to-let market has become more subdued, as has the market for home movers. The Council of Mortgage Lenders (CML) said this fall had been cancelled out by a pick-up in lending to first-time buyers but, overall, the UK’s housing market was in “neutral gear”.
Meanwhile, the CML has called on the Bank of England to relax the requirements of affordability tests for those applying for a mortgage owing to less activity in the UK housing market than previously predicted. In other words, there is less risk of a housing bubble than had been anticipated.
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