Low base rate 'positive for housing market'

Posted: 06 May 2010 11:30:42 GMT

If the Bank of England base rate remains at 0.5 per cent it will have a positive impact on the housing market, one expert has suggested.

Ben Wilkie, editor at What Mortgage, says: "The longer the base rate stays low, then the more people will have confidence in [accessing the property market]."

However, he advises that while he expects the base rate to stay at its current level for the next 18 months, people should be aware that it will need to go up at some stage.

Mr Wilkie's comments come in response to new predictions from the centre for economics and business research (CEBR), which suggest that mortgage rates will fall by the first quarter of 2011.

He states that while this is "optimistic", it is possible if the mortgage market becomes more competitive.

The CEBR also predicts that UK house prices are likely to rise by 5.3 per cent in 2010.

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