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Interest rate cuts must be passed on
The Bank of England’s decision to make further cuts to interest rates, this time by 1.5 per cent, has been welcomed by many across the housing market.
However, David Bexon, managing director of SmartNewHomes.com, explained that this can only be good news if the cuts are passed onto buyers as soon as possible.
He said: “While news of this heavy rate cut is welcome in the current climate, the latest drop in rates will have very little bearing on the market, unless we see these cuts passed onto borrowers with immediate effect.
“The current rate at which house prices are falling should be the main concern for everyone, lenders included, and everyone will continue to suffer if action is not taken and home buying and home building continue to stagnate. It is essential that mortgage finance is made available in order to kick-start the housing market,” added Mr Bexon.
Estate agents also welcomed the cut, Dominic Agace, managing director of Winkworth said: “At long last the Bank of England has made the drastic cut to interest rates that the various industries had been calling for, this will surely aid the speed of recovery for our beleaguered property market.
“For buyers, this move will improve sentiment and confirm to them that the bottom of the market, if not already reached, is in sight. Hesitancy will be replaced by more decisive action and I strongly believe we will see an increase in activity during early 2009,” Winkworth’s Agace added.
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