Base rate cuts 'unlikely' to benefit majority

Posted: 09 Feb 2009 08:42:02 GMT

Most Brits surveyed by financial comparison website moneysupermarket.com have claimed that they will lose out as a result of the recent cut to the Bank of England base rates.

As many as 70 per cent of respondents claimed that they would lose out as a result of the recent decision to reduce base rates to just one per cent, compared with just 23 per cent of respondents who claimed they would benefit.

Louise Cuming, head of mortgages at moneysupermarket.com, said: "Lower rates are not what the housing market needs at the moment. It is crying out for more readily available credit and, with these historically low rates, lenders will be even more wary of lending at volume.

"The Bank of England is creating the dangerous situation of a new breed of trackers with much wider differentials. We have already seen these margins more than triple since October - from 0.76 to 2.36 per cent. This cut could well herald tracker margins of three per cent, which would be calamitous for borrowers when rates start to rise again."

The base rates are indeed unlikely to increase mortgage availability, and so selling a house is likely to remain difficult for most.

Selling a house online, however, could prove beneficial to some homeowners, as more people could potentially see a home advertised online than in an estate agent's window.



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