9 Oct

Base rate cut 'must be passed on'

Base rate cut 'must be passed on'

The high street banks must pass on the base rate cut to mortgage customers if it is to help the property market as desired, the Home Builders Federation (HBF) has said.

Responding to the decision to lower the base rate from five per cent to 4.5 per cent and the government aid package for the banking system, HBF executive chairman Stewart Baseley welcomed the measures, but said it may need action from Alistair Darling to ensure mortgage lenders respond favourably.

He stated: "I hope that the chancellor will ensure that banks now start to restore mortgage lending to more normal levels."

Mr Baseley also said Mr Darling should work closely with the Bank of England to assess if more rate cuts are required.

In its response to the news yesterday, the Royal Institution of Chartered Surveyors suggested there will be more rate cuts in the months ahead, eventually bringing the base rate down to 3.5 per cent.

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