The Monetary Policy Committee (MPC) has decided to hold Base Rate at 0.5 per cent in April, the first time in several months that there hasn’t been a reduction.
This was the decision that had been widely anticipated, so how do property professionals feel now that it has been confirmed?
Building Societies Association (BSA)
Adrian Coles, Director-General of the BSA, said: “The Bank’s decision is not unexpected.
“Whilst savers will be pleased that rates have not been cut any further, this will do nothing to help those who have seen the income they earn on their savings diminish sharply in recent months. Similarly, today’s decision shouldn’t worsen mortgage availability.
“Leaving Bank Rate on hold allows the impact on the wider economy of the recent rate cuts and the decision to start quantitative easing to be assessed.
“It will take some time before the effectiveness of these policies becomes more clear.”
Moneysupermarket.com
Louise Cuming, head of mortgages at moneysupermarket.com said, “The decision to keep the Bank of England base rate on hold at 0.5 per cent was no surprise. It is expected to remain at this level for the foreseeable future but the next move is likely to be upwards.
“We don’t know when that will be – it will all depend on the success of quantitative easing – if the balance is not quite right, swift action to increase rates will be needed to prevent inflation.
“Anyone looking to lock into one of the competitive low rate fixed mortgages on the market at the moment should act now, before rates start to rise again.”
John Charcol Mortgage Broker
Ray Boulger of John Charcol, comments, “After a record run of six months of cuts, today’s unchanged bank rate decision was widely expected after Mervyn King’s comments last month on the very limited benefits of any further cuts.
“Borrowers with tracker mortgages priced below Bank Rate can expect to continue paying little or no interest for most or all of the rest of this year, or until the end of their deal, whichever comes first.”
Cluttons
James Hyman, Partner for Residential Sales at Cluttons estate agents, says: “It’s becoming apparent that interest rates cannot go any lower and we are already seeing mortgage lenders adjusting their fixed rate deals upwards.
“First-time buyers or those who have come out of the market temporarily should look to jump back in sooner rather than later. The bottom of the market is close to being called and the cost of borrowing is only going to rise.
“This could be the last really good opportunity to take advantage of the downturn both in terms of affordable borrowing and property prices.”
Legal & General
Ben Thompson, Director of Mortgages at Legal & General, said: “Interest rates are likely to have been replaced by quantitative easing as the main topic of conversation for the MPC today.
“However, the primary concern for borrowers will be how long rates are going to stay so low. They aren’t set to go any lower but they aren’t going to rise in the short term either.
“Inflation is likely to fall in the coming months as a result of the prolonged downturn so there is no impending pressure to raise the base rate at present. Borrowers need to seize this opportunity to pay off as much of their mortgage as possible. When rates do start to rise, it could quickly turn ugly.”
