A week may be a long time in politics, but in the lending market at the moment a week can represent a complete transformation in product choice that would normally evolve over a long period of time.

In a short space of time we have seen the return of some welcome elements of competition which, together with a fall in the cost of funds, has pushed product rates down. Some lenders, such as a re-invigorated Woolwich, have cut their rates by up to 0.6%, whilst others such as a totally reformed Northern Rock, have made an aggressive play to dominate the Best Buy charts.

Yesterdays darlings of the press, HSBC are no longer alone at the top of the charts, and plagued by tales of woe around levels of service, have been supplanted by a return of the rest of the high street.

Woolwich are a classic example with a cheeky Bank Base Rate Tracker at 1.98% until 31/01/2011, reverting to just 2.99% afterwards at current rates, (3.00% APR). They also have an excellent lifetime tracker product with the added benefits of a flexible Offset priced at 2.97%, (3.10% APR).

Their levels of service have been superb as well with many cases going to offer in just a week.

As far as the much trumpeted return of “the Rock” is concerned, their fixed rates, with uniquely flexible features and competitive fees, have brought some much needed choice back to the market.

Their two year fixed rate at 3.69%, (4.60% APR), is market leading at 70% Loan-To-Value, as is their excellent five year fixed rate product at 4.99%, (4.90% APR).

Whilst this competition is welcome, the other main news this week has been around new FSA regulations which, if introduced as they are, could serve to curtail lenders willingness to lend in certain cases.

Many who are self-employed, freelance or with irregular income sources may find themselves sidelined from the market for a considerable amount of time.

Whilst change and regulation is undoubtedly needed to some degree, a broad brush stroke does not necessarily solve the problem, and whilst on the one hand you have a Government ordering lenders to lend more, they are also making it harder for them to do so.

The good news, certainly in London however, is that the positives far outweigh the negatives for the first time in a long while. Though we should not get carried away on a wave of euphoria that all is well with the world, I still expect a slight dip as some kind of levelling off occurs; cautious optimism is the order of the day.

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