7 Apr

Property prices 'to stabilise' through mortgage boost

Property prices 'to stabilise' through mortgage boost

The return of more competitive mortgage rates to the market is just what is needed to ensure stability in house prices or even increases, it has been stated.

Head of mortgages at financial advisory firm Bestinvest Peter O'Donovan said lenders will not have planned the greater availability of such products "in a week" but will have thought matters through, while being encouraged to lend more by the government.

Raising the number of house purchasers "means first-time buyers", he added.

Reflecting on recent Bank of England statistics showing a rise in mortgage lending, he commented: "If there are more buyers then it means that eventually the prices are going to at least stabilise and then hopefully start to increase."

Mr O'Donovan was commenting in the wake of Abbey offering a new product at 85 per cent loan-to-value for first-time buyers.

The deal was set at a rate of 5.84 per cent, fixed over four years with a fee of £495.

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