Link between base rate and mortgage rates “severed”

An expert has suggested that mortgage rates are no longer influenced by the Bank of England’s base rate of interest.

Melanie Bien, director of Savills Private Finance, said that despite the Bank’s monetary policy committee choosing to maintain the base rate at 5.25 per cent, Abbey has announced its mortgage rates will be rising from next week.

“It proves that the connection between base rate and mortgage rates has been all but severed as lenders look to improve margins rather than market share,” she claimed.

Consequently, even if the base rate comes down further this year, this may not feed through to mortgage products, the expert suggested.

In order to make the most of the best deals currently available, need to “act quickly” before lenders remove them from the market.

Paul Holmes, chief executive officer of Firstrung, said that people are unlikely to be able to take out 100 per cent-plus mortgages any more.

However, despite some people criticising such products, Mr Holmes said that they were “very good” in some circumstances.

Tags: england, week, Link, abbey, Firstrung, Savills, order, market

Foreign ATMs gain in popularity

The number of ATMs which can deal in foreign currency will grow, it was claimed today.

According to UK cash machine operator Link, a big cause of this growth will be the convenience of holidaymakers who want to withdraw the relevant cash before they jet off.

Traditionally only found in airports, Link predicts that foreign ATMs will move closer to the mainstream of British life, and will be found on the high street more and more.

Head of planning and development at Link Graham Mott said: “The theory is at the moment that, rather than the person waiting until they get to the airport to get their foreign currency as many people do, they’ll get their foreign currency beforehand, in the weeks leading up to the holiday. Therefore, putting them in the high street or supermarket would do well, as that’s where people are going on a regular basis anyway.”

He added that customers seem to “like the idea” of the expansion, though the company does not receive the exact statistics for customer uptake.

Due to most only having four cash cassettes, it is likely that the high street ATMs will only have the capacity to stock euros and US dollars in future. To Mr Mott, this would not be a problem, as these are the two most popular currencies.

Link’s comments follows Tesco’s recent decision to expand its foreign ATMs from four to 20.

Tags: operator, Link, holidaymakers, airports, Commerce, growth