First-time buyers 'opting for fixed-rate deals'

12-May-2008

First-time buyers are opting for fixed-rate mortgages in record numbers, according to one leading lender.

John Charcol has said some 78 per cent of its customers arranged their mortgage on a fixed-rate in April, up from 64 per cent in the pervious month.

The group noted that the trend is unusually high, as it reflects the uncertainty prevalent in the current property market.

Commenting on the findings, Kate Tucker, technical manager at Charcol, said: "These peaks normally occur when Bank of England rate rises are expected, but as the Bank rate is widely expected to fall over the next year most of the high take-up was because fixed rates were a quarter to a half a per cent cheaper than trackers."

She added that the second consecutive increase in number of people choosing such deals illustrates that they are apprehensive about the strength of the economy, perhaps fearing that interest rates will soar as they did in the early 1990s.

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