Increased competition 'will keep mortgage rates low'

More competition among lenders will keep mortgage rates down this year, according to one industry expert.

Andy Pratt, chief operating officer at Alexander Hall, stated that he does not expect financial institutions to try and increase their margins during 2010.

"The cost of money is probably going to stay the same or reduce, so I can't see any reason for the margin to go up," he said.

Mr Pratt added that he does not anticipate a rise in the base rate of interest, which currently stands at 0.5 per cent, which is why margins are likely to at their present levels or potentially fall further.

According to the latest figures released by the Bank of England, the number of mortgage approvals in November increased to 60,518, compared with 57,718 in the previous month.

It also registered a £1.5 billion rise in the amount of net lending secured against dwellings for November.