Mortgage news
Latest Base Rate Decision
Kingswood Law comments on the Bank of England's decision to hold the base rate at 0.5%.
"The Monetary Policy Committee's decision to hold the base rate this month is not a surprising one. In recent months, the cost of borrowing has all but lost any linkage to the Bank Base Rate and any further cut is largely unnecessary as far as many borrowers are concerned, except those who have base rate tracker mortgages without a minimum rate.
It would appear that the MPC has this month paused for breath after six consecutive monthly reductions. Following on from these cuts to the base rate and the ongoing injection of funds into the system, the MPC has decided to take a step back and see whether these attempts to kick start the market have had an effect.
Low interest rates are good news for borrowers, but bad for savers, and a consequence of fewer people being attracted to save is that there are fewer funds available to lend out in the form of mortgages. Therefore, the situation as it stands is about the availability of money, and the capacity for lenders to be able to lend. We have now reached a point in the cycle where the MPC are employing alternative tactics and are taking a step back in order to analyse the effects of previous actions. This month's decision is a welcome one and we wait with bated breath to see what the longer term outcome will be, however the first tentative signs have been encouraging."
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