Cut in loan rates

With the ascending number of mortgage approval in UK made by banks in January has brought rays of hope to the people. Mortgage approval levels hit 23,376 last month up 4% comparison to December, the British Bankers Association said. (source- BBC)

The latest figures from the BBA have been disclosed after a number of reports have indicated the extent of the housing down turn. “The High Street Banks’ mortgage lending is still seeing double-digit annual growth, albeit in a much slower market” said a high official.

With interest rates at such a descending level, many people who reached the end of their fixed-rate deals stayed on the standard variable rate to which their repayments automatically reverted. When the rate was higher they were more likely to seek a new fixed-rate deal.

Another effect of the low Bank Rate was a fall in personal deposits in January. This is due to people moving their savings from ordinary savings accounts to alternative assets which offered higher returns.