Calls for rate cut fall on deaf ears
Concerns about the affordability of mortgages have failed to convince the Bank of England to lower interest rates.
The Bank's Monetary Policy Committee yesterday voted to keep the base rate of borrowing static at 5.25 per cent despite a plea from the National Association of Estate Agents (NEAE) to ease the strain on homeowners.
"The situation is by no means dire," conceded NEAE chief executive Peter Kind. "But the result could be very different if the Bank of England does not act now".
He said that the housing market ran the risk of stalling if the Bank failed to lessen mortgage burdens on homeowners and to do more to encourage mortgage approvals to rise again.
By deciding to keep rates at the base level of 5.25, however, analysts suggest the Bank remains confident in the resilience of the housing market, which continues to be propped up by an ongoing housing stock shortage.
It had been suggested that a short-term collapse of UK property could open the market up to first-time buyers, but that outcome now seems increasingly unlikely.
Published 8th March, 2008
© 2008 Estates IT Limited
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Concerns about the affordability of mortgages have failed to convince the Bank of England to lower interest rates.