There has been a decline in the number of people taking out fixed-rate mortgages, new figures show.
The Paragon's Financial Adviser Confidence Tracking Index shows that in the fourth quarter of last year, there was a significant decline in the number of products taken out.
With the threat of base rates increasing, Paragon believes this is why so many people are opting for other mortgage products.
"We saw the proportion of fixed rate cases rise substantially in both the first and second quarters of the year," said managing director of Paragon Mortgages John Heron.
He said that this was understandable as "borrowers wanted to lock themselves into attractive deals before the rate started to rise again".
The number of fixed-rate products introduced by brokers in the third quarter of 2009 stood at 62 per cent, but declined in the fourth to 46 per cent.
However, base rate tracker mortgages increased from 33 per cent to 45 per cent in the latter part of last year.
"The rates attached to fixed rate deals are currently less attractive and borrowers increasingly opted for tracker deals during the latter half of the year, particularly in the final quarter," Mr Heron revealed.
There has also been a rise in the number of repayment mortgages, Paragon found, with an increase of one per cent seen between the two final quarters of 2009.
Latest figures from the Land Registry show that in November, house prices increased by 0.9 per cent on the previous month.
Meanwhile, the average house price in the UK currently stands at £161,554, showing an annual change of -0.3 per cent.
In September, the number of house purchases completed increased by 30 per cent compared to the same period last year, although transaction volumes still remain fairly low. |
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