The outbreak of a mortgage price war could dent hopes of further cuts in interest

The outbreak of a mortgage price war could dent hopes of further cuts in interest rates, analysts said as new figures showed the housing market was holding up well. Cheaper mortgages should mean that consumers have more money in their wallet to fund spending elsewhere in the economy. The fierce competition between lenders culminated yesterday in Nationwide and Halifax wiping up to 0.75 per cent off their basic mortgage rates.Figures from the Council of Mortgage Lenders yesterday showed a record share of new mortgage money went towards people seeking a cheaper deal rather than buying a new home in January. A third of mortgage advances were used for remortgaging, the highest share since monthly records began in July 1998.Michelle Vosper, a CML spokeswoman, said: "The market is very competitive at the moment and has been for some time. Remortgaging activity has been strong and will continue to be so." She said there was a growing awareness among homeowners that it was possible to lower their mortgage costs by switching lender."We are seeing mortgages being sold over the telephone and the internet and this can cut costs for lenders," said Ms Vosper.Economists said the battle for customers could stimulate demand in the housing market.

"Mortgage rate cuts of this size are good news for consumers, and base rates may not now be cut until June," said Jeremy Hawkins, an economist at Bank of America. "To an extent the mortgage giants are doing the central bank's work for them."The CML said new fixed mortgage rates fell to 6.23 from 6.39 per cent in December. The British Bankers' Association said mortgage lending rose by £2.8bn in January, the strongest increase since June last year.Tim Sweeney, the BBA's director general, said: "Conditions look set for activity to increase this year and the recent cut in interest rates will help."Adrian Coles, head of the Building Societies Association, which reported a jump in mortgage approvals to £1.81bn from £1.65bn, added: "I expect to see further growth following the drop in interest rates."Ciaran Barr, chief UK economist at Deutsche Bank, said the underlying state of the economy and indicators such as low unemployment were more important for the housing market than selective mortgage rate cuts."The market is holding up pretty well and it has the potential to get a second wind in the second half of the year," he said.. Orange, the recently floated mobile phone group, is looking to a bright new future for its pan-European corporate headquarters at the giant redevelopment scheme in Paddington, west London. Orange, the recently floated mobile phone group, is looking to a bright new future for its pan-European corporate headquarters at the giant redevelopment scheme in Paddington, west London. The group, majority owned by France Telecom, has signed up to move its head office from its small office in George Street in the West End of London to the nearby Paddington Basin.Orange will occupy a nine storey building, designed by the architects Terry Farrell, which will provide some 228,000sq ft of accommodation.It is the first pre-let property deal at Paddington Basin, kick-starting the 2 million sq ft scheme. Orange has only about 70 employees based at George Street, with a further 1,000 scattered across London.

The workforce is due to be centralised on the site at Paddington from 2003.Under the ownership of France Telecom, the wireless group has acquired a much expanded number of mobile phone operations. A spokeswoman said that the enlarged company needed more space.The £800m Paddington Basin scheme, 50 per cent owned by the property developer Chelsfield, is also negotiating two further pre-lets, which would complete the first phase of the project. It is thought that another one of the potential new occupiers is Healey & Baker, the property consultants.Nigel Hugill, managing director of Chelsfield, said: "The decision by Orange is further evidence of the momentum now established around the Basin. They help set the tone, not only in terms of status, but also by bringing a young and energetic occupier base."The Chelsfield-led scheme is only one of the number of regeneration projects planned for Paddington, which aim to transform the area into a new commercial and residential hub. Some 8 million sq ft of new business and residential space is planned.. Serco, the controversial provider of management services to the public sector, is close to clinching a deal that would see it provide the country's first national road traffic control centre. Serco, the controversial provider of management services to the public sector, is close to clinching a deal that would see it provide the country's first national road traffic control centre. The move would see Serco build a national monitoring centre for the Highways Agency and lay traffic detectors across the country's roads.Steven Beeston, the company's chief executive, said: "At the moment, there is regional coverage but nothing national.

This new centre would be a cornerstone in the Government's integrated transport policy and its drive to reduce congestion."The £100m facility would have a police presence in the building, as well as Serco staff. It would allow traffic to be directed strategically, cutting down on congestion build-ups. The traffic data would also be sold to companies that wish to provide services based on it.It also emerged that Serco is in final negotiations to extend its management of the Atomic Weapons Establishment, at Aldermaston, from 10 to 25 years, which would make the contract worth £2.1bn. As part of the deal, Serco would raise a £400m fund to upgrade the facilities at the site, which houses 2,000 scientists and runs Britain's nuclear weapons programme.The developments were announced yesterday with Serco's results for last year, which showed pre-tax profit up 20 per cent at £37.7m - the 13th consecutive year of such growth.Serco is one of the three bidders for the competition to take a 46 per cent stake in National Air Traffic Services that the Government is divesting. The Office of Fair Trading is investigating the competition implications of Serco's bid, as the company already runs some UK air traffic services Mr Beeston said yesterday: "We believe the OFT is happy. The issue is pretty much resolved."Serco refused to comment on the progress of the competition.

The Government has stated that it will sign the deal by 1 April. That would require it to select a preferred bidder, with which to hold final negotiations, in the next couple of weeks, insiders said.That decision could come as early as this week. It is understood that the panel examining the bids, which includes the investment bank CSFB, has completed its assessment of the bids. The issue is now before ministers at the Department of the Environment, Transport and the Regions.. United Pan-Europe Communications, a Dutch cable TV operator, was yesterday forced to restructure its planned purchase of a 25 per cent stake in the British cable company Telewest Communications, after bondholders rejected the deal that was on the table. United Pan-Europe Communications, a Dutch cable TV operator, was yesterday forced to restructure its planned purchase of a 25 per cent stake in the British cable company Telewest Communications, after bondholders rejected the deal that was on the table. Under the original highly complex proposal announced last June, UPC's parent company, United GlobalCom (UGC), would have taken control of the Telewest stake from the US-based group Liberty Media.