10 Jul

Interest rates held at 5%

Interest rates held at 5%

The Bank of England's monetary policy committee (MPC) has decided to hold interest rates at five per cent.

This will come as a disappointment to many property organisations, as the industry widely called for a cut in the base rate to help boost the housing market.

However, the Royal Institution of Chartered Surveyors (RICS) acknowledged the Bank's need to balance economic growth against rising inflation.

It predicted that the current downturn will prompt the body to cut rates later in the year.

The organisation noted that although tighter lending conditions are a symptom of the UK's wider financial problems, "there are still measures that the government can take to ease the pain of first time buyers … for example, fundamental reform of stamp duty from a 'slab' to a 'marginal' system would make it fairer".

Earlier this week, RICS found that first-time buyers on a low income bracket would have to save up an entire year's combined salaries to be able to step onto the property ladder.

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