Homeowners already paying record low rates of interest on their mortgages can breathe yet another sigh of relief after the Bank of England’s (BoE) Monetary Policy Committee decided to leave interest rates at 0.05% earlier this week.
Committee solidly behind chairman
They can also plan ahead a little more comfortably as the prospects of any rate changes seem to have disappeared for the rest of this year. The committee voted unanimously to keep the rates on hold, the first time it has happened this year, and a sign that the entire bank is solidly behind Mervyn King and his approach to the financial pressures embroiling the UK. It now seems more likely that quantitative easing will be the preferred option on bringing the UK back to more comfortable growth figures. The committee believe inflation will peak at around 5% and start falling back in the winter.
Stable rates should boost home sales
With some city experts now predicting rates to stay low throughout 2012, it does open the door for homeowners to make plans for the future. Many in the housing sector will hope the predictions of city analysts will kick start home sales, and that prospective home buyers will at long last be tempted to buy household insurance on a brand new property. Certainly estate agents across the country have been quietly noting a small increase in sales over the last couple of months and in Cornwall, holidaymakers have not only been spending their time on the beaches they have been spending it on holiday home insurance quotes as properties that have been on the market for many months are suddenly flying off the shelves.
Banks hold the key
There have been bargains galore for several years in the housing market but the restrictive offers made by lenders have made it almost impossible for young investors to get a foothold on the property ladder. If just a few decent mortgage deals are put forward by lenders, estate agents now feel the market would open up very quickly. The signs are certainly there and a buoyant housing market would certainly give some impetus to the economy. The question is will the banks let the purse strings loose?