Released on: April 24, 2008, 6:30 am

Press Release Author: Jim watson

Industry: Real Estate

Press Release Summary: Those considering buying investment property who may use a
mortgage to do so will most likely have been keeping an eye on the fast-developing
mortgage sector in recent times, in which the abundance of choice that was available
a year ago has been substantially whittled down.

Press Release Body: Those considering buying investment property who may use a
mortgage to do so will most likely have been keeping an eye on the fast-developing
mortgage sector in recent times, in which the abundance of choice that was available
a year ago has been substantially whittled down.

For the UK property market, this may have all kinds of ramifications. On the one
hand, the withdrawal last week of popular products to which mortgage hunters have
been rushing by the Co-operative Bank and First Direct may not be the last such
cases, according to personal finance magazine Moneywise.co.uk. Editor Rebecca
Atkinson said that while raising rates the way Halifax have done may be the approach
some take, \"it\'s fairly likely that others will suspend lending for new customers as
well\".

Those who haven\'t done that have, as in the case of Halifax, raised rates for those
who cannot put together a 25 per cent deposit, whereas Abbey has axed its 100 per
cent loan-to-value deals.

Of course, many of those investing in UK property may have the kind of capital
necessary to cope with these restrictions, for instance by being able to sell an
existing asset in order to raise the extra needed to fund a larger deposit. In the
wider market, however, the current situation is sure to affect some first-time
buyers.

The consequences of this may be twofold. Firstly, as has often been suggested, the
buy-to-let market may be a winner from the increased demand for such accommodation
from people who would otherwise be getting on the housing ladder until the market
perks up again, with an improvement in the credit situation and sufficiently
affordable prices to lure buyers back.

However, the second result may be a much longer-term trend, in the most literal
sense. While research by Abbey has found that among re-mortgagers the popularity of
five year fixed-term mortgages has jumped in the last month from ten per cent saying
this would be their deal of choice if they were to remortgage tomorrow to 24 per
cent, this appears to be contradicted by figures from the Council of Mortgage
Lenders (CML) suggesting the reverse. These statistics indicate that in February
just 52 per cent of borrowers chose fixed-rate deals, a situation it attributes to
the expectation of more interest rate cuts.

Such a contrast may seem a paradox, not least as Abbey\'s head of mortgages Nici
Audhlam-Gardiner suggested mortgage customers are \"keener then ever to lock
themselves into a deal for longer than two years such as a five-year fix\".

This may hint at an the explanation that squares the circle, bolstered by another
finding of the Abbey survey, which showed a much smaller increase in the number of
people who would take a two-year fixed-rate deal from seven per cent to ten per
cent. Therefore it may be that those whose horizons are less fixed on the long-term
are looking no further than the next few months.

In contrast, the longer the fixed-deal offered the more people who want to take it.
This may suggest that the further ahead a customer wishes to look, the greater the
desire to opt for the certainty of a long-term rate.

Chancellor of the exchequer Alistair Darling has frequently said he wishes to
encourage such long-termism, including fixed rates that last as long as 25 years.
Another piece of research, from the Fair Investment Company, has found that 40 per
cent of new borrowers would be willing to take on a deal. So emerges the pattern:
the longer the fixed rate deal, the more who like the idea.

If Mr Darling\'s desire for long-term mortgages to be commonplace is fulfilled due to
a change in thinking prompted by the credit crunch, then the long-term implications
could be significant. For should a large segment of the mortgage market - including
owner occupiers and investors - opt for fixed rates that last for many years, it
could see an end to the fluctuation in popularity between variable and short-term
fixed deals that has characterised the shift between rising and falling rates in the
last two years.

In today\'s world Property investment is an excellent investment option especially
investment in UK

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