Interest rate hold "disappointing" for property market

May, 09, 2008

The decision by the Bank of England's monetary policy committee (MPC) to maintain the base rate of interest at five per cent has to be "disappointing" for the property market.

In news that may be of interest to people looking to compare popular mortgages, Duncan Samuel, managing director of web-based property conveyancers Convex.net, explains that the market is "already in danger of stalling".

He continues to note that the lack of activity from mortgage lenders is "undoubtedly" having a negative effect.

As such, Mr Samuel suggests: "Very soon the Bank of England will need to do something to bring the London Interbank Offered Rate (Libor) rate down to free up mortgage funds."

The MPC's decision to maintain the base rate of interest followed the resolution to lower it by 0.25 percentage points from 5.25 per cent on April 10th.

Karen Ward, UK economist at HSBC stated in recent days that the organisation expects a rate cut in June.