There are renewed signs of life emerging in the mortgage market over the last few days. Prime lenders such as Abbey and Nationwide have reduced their fixed rates and sub prime lenders such as IGroup and Money Partners have also indicated that rates may come down.
This is basically due to swap rates falling dramatically over the last few weeks, coming down by 0.7% from there high a month ago. Swap rates are the indicator that lenders use to determine the price of their fixed rate products.
The dire inflation news has failed to impact swap rates over the last 2 weeks and hopefully we should see other lenders follow suite as they should be able to offer better priced products. This will naturally bring some competition back into the market which is what has been missing since August 2007 when lenders have been reigning back their activity.
The price reductions have also affected the price of tracker mortgages.
Hopefully this could be the start of some form of recovery in the mortgage market and although things are unlikely to dramatically change overnight it may be the catalyst for a slow path to recovery.