21 Oct

Successful government policy 'could see major property recovery'

Successful government policy 'could see major property recovery'

The property market will stage a strong recovery if the government's recent financial stability package works as planned, it has been stated.

Selwyn Lim, director at analyst firm Mouseprice, said: "If it [the financial stabilisation package] is really successful then the banks will start lending again and the future will look a bit rosier."

Such a situation could increase the availability of mortgages as the banks will be able to access more finance.

He added that a further interest rate cut could also have "a very big impact on the future of the housing market".

Earlier this month the Bank of England's monetary policy committee (MPC) decided to trim the base rate by 0.5 per cent to 4.5 per cent in conjunction with identical reductions by the US Federal Reserve, the European Central Bank and the central banks of Canada, Sweden and Switzerland.

The minutes of this month's MPC meeting will be released tomorrow, giving reasons for the decision and possibly indicating whether more rate reductions are on the cards soon.

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