Bank lowers rates for fifth consecutive month

Posted: 06 Feb 2009 08:37:24 GMT

The Bank of England has, for a fifth consecutive month, lowered interest rates, bringing them down to a new historic low of just one per cent.

The decision, made yesterday (February 5th) by the Monetary Policy Commission, means that the cost of mortgage repayments will now be attractively low to many.

However, there has also been some opposition to the move, which has been described by the Building Societies' Association (BSA) as negative in the long run due to the lower amounts of cash which will now flow to banks.

"The decision is also bad news for mortgage borrowers," said the BSA.

"Although the cut will benefit borrowers with tracker or variable rate mortgages, research by BSA has found that concern over getting a mortgage or getting a large enough mortgage is a much greater worry than affording mortgage repayments."

Nevertheless, the move will likely add to a recent surge in confidence in the market noted by Rightmove.co.uk research, and could lead to a slowdown in the fall in house prices.

Those hoping to make a purchase soon may wish try buying online, which could offer the chance to avoid having to pay for expensive estate agents, making the chance to own property even cheaper still.



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