Demand for five-year mortgages expected to grow

The number of homeowners looking for longer-term fixed mortgage deals is set to rocket, a leading bank has reported.

Research by Abbey Mortgage Index has shown that buyers seeking a fixed deal lasting five years have doubled in a month to 24 per cent.

The popularity of two-year fixed-term deals rose by just three per cent to 10 per cent.

This is in contrast to tracker mortgages which only five per cent of borrowers said they would opt for.

Nici Audhlam-Gardiner, director of Abbey Mortgages, said: “Recent reports about the shrinking mortgage market seem to have had a profound effect on borrowers.”

Abbey advised mortgage providers to prepare for a rush on longer term deals as borrowers seek stability amid the credit crunch.

The decrease in the availability of mortgage deals is guiding homeowners towards more lengthy mortgages suggests Ms Audhlam-Gardiner.

“Homeowners faced with a dwindling number of mortgage deals seem keener than ever to lock themselves into a deal for longer than two years such as a five-year fix,” she added.

Statistics by Moneysupermarket.com revealed that mortgage deals have decreased by 60 per cent compared to before the economic slowdown

Tags: Business Finance, Mortgage loan, moneysupermarket, mortgage index, Nici Audhlam Gardiner, Nici, rush, slowdown

Shopping around can improve “financial fitness”

Consumers can improve their “financial fitness” by shopping around for the best deals on mortgages, credit cards and insurance, claims one financial expert.

Abbey said that there is certainly more that most consumers could do to ensure their finances could be improved and looking around for a better deal could make a big difference to the amount of money paid out.

Nici Audhlam-Gardiner, head of mortgages with the company, said: “It’s all about discipline, in the same way that you can be physically disciplined if you decide to get physically fit.”

She added that it is unlikely that someone who set up a bank account ten years ago is still receiving the best interest rate on the same deal.

Looking around for different offers can make a “big difference on your month by month basis, in terms of how much you’re earning”.

According to research conducted by ICM for Abbey, 21 per cent of people renewed their home insurance without shopping around and four per cent do not have any home insurance at all.

Tags: head, best interest, Financial economics, Nici Audhlam Gardiner, abbey, expert, account, credit

Increasing numbers of students preferring to save over travel

Increasing numbers of students are foregoing a gap year to go travelling, preferring to put money away for property, according to new statistics.

Findings from Abbey revealed that 42 per cent of respondents are opting to save towards a deposit on a first home.

This is twice the number of students saving up to go travelling or for a new car after they have graduated.

Nici Audhlam-Gardiner, head of Abbey Mortgages said: “House prices have brought in a harsh new reality for students.”

“They now need to weigh up the benefits of travelling against jumping straight into a career and being able to afford to get onto the property ladder,” he added.

A further 21 per cent of past graduates thought they could definitely have saved more money while at university, while 2.9 million (17 per cent) wished that they had worked harder and played less, according to the figures.

Recent research from Abbey showed that up to 15 million Brits suffered financially as a result of being unprepared for big life changes.

Tags: gap year, Gap, Mortgage loan, Nici, property ladder, life changes, result, Nici Audhlam Gardiner

Student mortgages remain popular

Despite the imminence of a market cool down, students are still looking to invest in property in their university town.

According to recent research by Abbey mortgages found that as many as 66,000 students already at university want to get a mortgage on their own place.

Furthermore, it found, 14 per cent of the student population hope to buy a house in their university town. This represents an impressive total of 154,000 students.

Nici Audhlam Gardiner, head of mortgages at Abbey, commented: “Britain’s student population continues to be a source of income for buy-to-let property investors, many of whom are parents of the students or the students themselves.”

He added that the most important issue to think about is affordability, especially when getting a buy-to-let mortgage.

Many students (44,000) have parents who are thinking of investing in property in a university town. The same amount hopes to invest with friends whilst at university.

With increased concern to find “green” financial products, the Co-operative bank has advised that there are many different options in this field from lenders and borrowers must shop around to find an option that best suits their needs.

Tags: Nici Audhlam Gardiner, Britain's student population, amount, property investors, imminence, student, Subprime mortgage crisis, town