interest rates
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Housing Market
Bank of England cuts interest rate to 0.25%
The rate cut of half a percentage point by the Bank of England as a monetary stimulus has been welcomed by property experts.
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Latest property news
Interest rates to remain unchanged
The Bank of England Governor Mark Carney has indicated that interest rates are going to stay lower for longer than expected, with a rate rise now forecast for 2017 at the earliest. With the recent stock market turmoil and the oil price rout showing no sign of abating, Carney has said that “now is not yet the time” to raise rates from their historic low of 0.5 per cent, adding that any such move would “depend on economic prospects, not the calendar.” Some economists have even mooted the idea of a possible rate cut should economic conditions worsen markedly, particularly after Japan recently reduced its borrowing rate. Philip Shaw, Economist at Investec, said, “It would also be interesting to know what weight, if any, the MPC places on a prospect on a reduction in the Bank rate.” Meanwhile, the former City regulator Adair Turner has warned that without radical policies, the UK economy could be stuck with low interest rates “almost indefinitely.” He forecast that “interest rates in the UK may not go up beyond two per cent by 2020.”
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Latest property news
Mortgage rates hit nine-year low
Interest rates on mortgages have hit record lows, but borrowers are being hit with higher fees, as banks look to protect their profit margins, according to figures from Moneyfacts.co.uk. The average interest rate on a two-year fixed mortgage fell to 2.52 per cent in February, down from 3.14 per cent a year earlier and the lowest level since Moneyfacts.co.uk, which compiled the data, began monitoring the sector in 2007. But while interest rates might be falling, banks are increasing the fees they charge borrowers to arrange a loan, with the average mortgage fee today being a full £68 higher than in June 2014 – hitting a 21-month high. Some of the fees borrowers are being asked to pay is nothing short of shocking – up to £7,499. “The current mortgage market boasts some of the lowest rates on record, which is great news for borrowers, but the increase in the average mortgage fee clearly shows that some of these headline grabbing rates are being compensated for elsewhere,” said Charlotte Nelson, from Moneyfacts.co.uk. “Some of the fees borrowers are being asked to pay are nothing short of shocking, with up to £7,499 being charged for some high value loans,” she added.
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