7 Jan

Interest rate decision 'the right choice' for the housing market

Interest rate decision 'the right choice' for the housing market

The Bank of England's decision to hold the base rate of interest at 0.5 per cent for the 11th consecutive month has been welcomed by professionals in the property industry.

Robert Sinclair, director of the Association of Mortgage Intermediaries (AMI) welcomed the rate hold.

He explained that the AMI considers the economic recovery to be fragile, adding that the housing market is still vulnerable to any shocks.

"Only if it is demand led should the committee use the interest rate tool at this point in the recovery," Mr Sinclair commented.

Ben Thompson, director of mortgages at Legal and General, predicted that rates will not increase until 2011.

He stated that it is uncertain how this will impact the property market and borrowers because "we've never seen financial intervention on this scale before".

Mr Thompson also pointed out that over the coming 12 months, inflationary pressures could change the housing sector considerably.

Factors such as the quantitative easing package, rising oil prices and the VAT increase could all contribute to upward pressure on property values, he said. ADNFCR-1222-ID-19545812-ADNFCR

Cookies We use cookies to ensure that we give you the best experience on our website. To find out more about our cookies policy, see our cookies policy here or in the footer.