Money Insider: Savings best buys – blink and you'll miss them

Fixed rate deals have easily been the most competitive element of the savings market throughout the last 12 months, and the rush by savers to get their hands on a best-buy rate shows no signs of easing.

The latest Moneynet research reveals that current high levels of demand has resulted in more than a dozen best-buy bonds being withdrawn during the last 10 days.

One of the main reasons these bonds have had such a short shelf life is down to people coming to the end of a very attractive deal from one or two years ago, and trying to lock in to the best rate around at the moment.

Savers who fixed their interest rate 12 months ago could be coming off a rate as high as 5.75 per cent ( perhaps taken out with ICICI Bank UK or Anglo Irish Bank) and many of those who locked in for two years in December 2007 will be waving goodbye to a rate of six per cent and above, with the likes of Halifax paying as high as 6.45 per cent back then. Savings of £20,000 will have earned £1,150 in interest (gross) on 5.75 per cent from a year ago, whereas the best one-year bond available at the moment – with State Bank of India at 3.75 per cent – will net just £750.

The market is, however, more competitive over two years where there is no shortage of overseas and more niche players looking for a slice of the action. Rates on two-year bonds are currently paying almost 0.75 per cent more than one-year options, so it's worth considering splitting your savings pot and locking some of it away for one year and some of it for two.

Elsewhere, the Chancellor's stamp duty hammer blow in his pre-Budget report overshadowed some positive news in the mortgage market.

Yorkshire Building Society last week launched two first-time buyer mortgages as the outlook for new borrowers started to look a little brighter.

Although borrowers still need to find a 15 per cent deposit, it is good to see more keenly priced options, with a three-year fixed rate at 5.84 per cent and a five-year fixed rate product at 5.99 per cent on offer. These mortgages also come with a free valuation, free legal work, £500 cashback and, importantly, no upfront fees.

For those in the market for an 80 per cent loan-to-value mortgage, Newcastle Building Society has stormed the best-buy tables with some excellent new fixed and tracker mortgage products

This stand-out deal is a two-year fix at just 3.65 per cent with a £999 fee. This is a bold move by the Newcastle and, with the products available for both purchase and remortgage, there's likely to be no shortage of demand.

However, just as we appeared to be moving up a gear and a little confidence was returning to the mortgage and housing markets, Alistair Darling put a damper on things.

The pre-Budget report signalled the end of stamp duty exemption for properties up to £175,000, a move that risks wiping out any early signs of recovery.

The Chancellor admitted the recovery is fragile but still pushed ahead with this short-sighted decision to reintroduce the one per cent tax levy on properties priced £125,000 and above. With many lenders still erring on the side of caution, first-time buyers are already faced with finding deposits of 10 per cent to 20 per cent, so having to pay at least an additional £1,250 in taxes could hamper demand at the vital first rung of the property ladder.

Andrew Hagger is a money analyst at Moneynet.co.uk