January Interest Rate Cut Comment

January 8th, 2009

Winkworth welcomes today’s decision to cut interest rates by 50 basis points.  The cut takes base rate from 2% to 1.5% – the lowest level ever set by the Bank of England in its 315-year history.

Winkworth believe that the rate cut should encourage renewed interest in property as an investment as interest on savings falls.  Following today’s announcement, Dominic Agace, Managing Director of Winkworth Franchising Ltd commented:

‘A 0.5% reduction in interest rates is another step in the right direction in the housing market.  It will improve finance availability in the medium and long term as it speeds up the rate at which banks re-build their margins on mortgages thus improving their balance sheets.  Indirectly, it will help spark interest in the property market as returns on savings disappear and people re-consider property to provide a short term rental return and long term growth.  I don’t foresee an immediate reaction, but it represents some positive news for the property market.’

Ian Fraser, Franchisee of Winkworth Islington, has already had a positive start to 2009 and believes the effects of the rate cut will, in time, filter through to the property market, Fraser says:

‘Every little bit helps.  Although the rate cut will only have an instant impact on people with tracker mortgages with no collar, hopefully the rate cuts will slowly filter through into the variable and fixed rates, even if they are not passed on in full. The cut will have a positive knock-on effect on the confidence of prospective buyers as affordability of mortgage payments increases, combined with the lower house prices, making a property purchase a far more attractive proposition than it was before.

In Islington, so far we have had a positive start to 2009, there seems to be a more bullish mood from buyers with plenty of new registrations.  We have already had two offers, at a higher level than offers made on the same properties last year, which is a very good sign.’

Winkworth hopes that lenders will be willing to pass the cut on in full to their new mortgage rates, Ian Dickson, director of Winkworth offices in Hammersmith and Shepherds Bush says:

‘I welcome today’s rate cut and, as long as it is passed on by banks, it will undoubtedly help to hasten the recovery of the property market.  I have already seen encouraging signs, with the number of new enquiries up during the first days of 2009.

I hope that lending institutions will now make funds available that reflect this latest interest rate cut.  The cheaper loans become, the more attractive the property market becomes.’

Posted in Industry-related News, Property-related News, UK Market Comment, UK Press Releases

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