09.07.09 by Andrew Montlake
Bank of England Base Rate Remains Unchanged at 0.5%
Whilst there was no surprise that the Monetary Policy Committee left the Bank of England Base Rate unchanged at its historical low of 0.5%, all eyes were really focussed on whether or not the policy of Quantitative Easing (QE), was to be increased further.
In the short term at least, the Bank are still committed to this programme, although this policy of printing money in order to help stimulate the economy is something that many are unsure of. It is difficult to accurately analyse the effects of such a move without the benefit of hindsight.
As we enter the traditionally quieter summer period, it seems that things are going to be tough for many in the property industry. Lenders are still battening down the hatches, tightening their lending criteria and cherry picking the very least risky applicants, whilst interest rates on products continue to edge upwards as their appetite to lend is still subdued at best.
The confusion around house prices continues as the latest Halifax property survey shows a decline in June, albeit a small one and following a large rise in May, of 0.5%. This comes after the Nationwide’s’ verdict that we have now seen 3 months of slight house price growth.
The positive news is that almost everyone seems to believe we have now reached the bottom, and whether or not we bump around the sea bed for a while, which is highly likely, a feeling that we have seen the worst is welcome.
At this stage in the cycle we expect to see little changes up and down before a concerted recovery, probably around spring next year. If the increasing demand we are seeing in London is anything to go on, and it usually is, the time to buy is definitely this year.
The broad picture will only really begin to change once lenders are able to return to the market with any sense of normality. They are still strangled by the costs they face and the general unknown as to what restrictions tighter regulation will have on them, but in order to work properly they still need to get back to lending sooner or later.
There are, however, still some great little products around for those who satisfy lenders criteria. To find out more speak to one of our consultants now on 020 7856 2454.
Monty’s Mortgage Blog
19.08.10
Mortgage Lending Up...A Bit
Today saw the release of the latest set of data from the Council Of Mortgage Lenders, (CML) stating that Gross Mortgage Lending rose by 5% in July compared to June, although this is still 3% down from July 2009.
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