Nov 08
6
Quick Poll: 1.5% Interest Rate Cut
The Bank of England has cut interest rates by an unprecedented 1.5 per cent.
The reaction from housing market professionals to the interest rate cut has been both surprise and delight - though there is concern that lenders will not pass the cut onto consumers.
Will the rate cut be enough to encourage buyers back to the market and stop house prices from falling?
Please vote!
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Posted by 
I think it will aid the failing house market slightly. Unlikely that we will see first time buyers being offered the money that is required however.
Makes me feel sorry for the people who sold their houses and banked the money although I guess it was always a gamble. Boo hoo…
Did the Bank of England really make this decision alone or was Gordon Brown putting pressure on them? We will have to wait Merv’s memoirs to be published I suppose!
Depends on the willingness of banks to pass the reduction onto its customers?
It may get some action on that front - but the hit on inward investment to the UK will affect jobs.
Still that will mean fewer “hard working families” for the politicians to worry about.
I say yes provisionally, although it will take time and will only happen if the mortgage lenders pass on the rate cut to their customers.
No amount of tinkering will have any effect. Market to revive itself in Spring 2010.
If banks decide to pass on the new rates on thier new mortgages then yes it will revive the housing market and the economy…
Only existing borrowers will benefit from this from now and only help the economy a little bit just in time for the Xmas spending flock..
I hope banks will give out new cheaper mortgages… Banks will decide whether or not it will work - however savings accounts will be hit hard now and cause other problems for those saving to buy a house and relying on the rates..
Ben.
This decision will help customers and buisnesses if the Lenders ever wake up! but the property market will keep dropping, slowly and alot of bargins are to be made in this downturn.
The main concern is how much the banks require to purchase a property!
25, 30, 35% thats alot of money!
so the banks messed up they can sort out this mess!
REMEMBER: YOU WILL ALWAYS MAKE MONEY IN PROPERTY, YOU HAVE TO BE PATIENT 10 - 20 YEARS OF GROWTH IS HUGE GAINS.
THE FALLS ARE ALWAYS LOWER THEN THE GAINS!
TAKE A MINUTE AND THINK ABOUT THAT
GOD BLESS
Yes, it will affect the market price and i think that the lenders will lower their fix rate and this will give good opportunities for the first time buyer to inter the market..
Lenders don’t borrow at BofE base rate they borrow at LIBOR which is still significantly above the Bof E base rate. Before the credit crunch the difference was minimal. Also, banks are looking to increase their margins from their few remaining income sources. In addition, they can’t lend as much as before because their balance sheets are shot to bits. Finally, as we enter a recession with job losses and home repossessions - the housing market will decline further not mount a fabulous recovery even with lower interest rates.
all the comments above are relevant but nobody is taking into account that there are now very low levels of property coming onto the market and there is a self-correction going on. There will probably be a shortage of property in the Spring and with lower interest rates coming through there will be a few more buyers around - this is a recipe for prices stabilising and in due course an increase in sales (not prices) next year.
Existing mortgage holders will benefit first. The standard variable rate has been lowered by most lenders, however no new deals are available at or below this rate (5% with C&G)), so if your mortgage is coming to an end you are better off leaving it - for the time being! Any deal which is below the SVR will incur a large arrangement fee which will make it not wortwhile?