10 Jan, 2008
Powley - 10-Jan-2008
The Bank of England has maintained interest rates at 5.5 per cent
with commentators suggesting a rate cut is now due in February.
Some commentators have reacted with anger at the decision.
Propertyfinder.com chief executive Warren Bright warns that the BoE
is "sleepwalking into a housing recession."
He adds: "Confidence in the property market is very shaky and
many lenders have walked away from the mortgage market, or jacked
up their rates and fees significantly. It is time for decisive
action to reassure house buyers and sellers. Rate cuts must come on
the agenda now.'
Connells Survey and Valuation managing director Ross Bowen also
believes the BoE should have made a cut this month.
"Our data show mortgage approvals fell very sharply in December -
this is yet to show up in official figures. More decisive action is
needed to restore confidence to the housing and financial markets
if we are to avoid the current doldrums having a more fundamental
impact on the economy."
Head of Abbey Mortgages Nici Audhlam-Gardiner says: "The Bank of
England's decision to hold the base rate at the current level was
expected, given some mixed signals, a slowing economy but still the
prospect of some inflation.
"While we've seen indications of house price growth in
December, this came after a couple of months of house price falls
and a drop off in activity from house buyers and sellers. Borrowers
are still feeling stretched after the rate increases from the last
couple of years, and those coming to the end of their fixed rate
deals are still likely to see their interest rates go up.
She says that a rate cut is still looking probable in February, if
the underlying market conditions do not improve.