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1.5% Bank of England rate cut!

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  • 1.5% Bank of England rate cut!

    Well it's just been released that the BoE has slashed 1/5% off the base rate. This means base is now at 3% the lowest since 1955. There has not been such a big cut in the rate since 1981. Is this finally a sign that sensible access to credit will start to return to the market??

    Unfortunately there's no guarantees as after the last 0.5% cut a few weeks ago many banks actually INCREASED their mortgage tracker rates (Abbey for example). However there is growing pressure from all angles so maybe this time we will see the rate cut passed on to consumers.

    It's about time - most banks are now in effect funded by the tax payers money and yet they have still not started lending to back to the tax payer! This smells of the arrogance with which the banks treat us all and one of the key reasons they got us all in this mess in the first place.

    There are no longer any excuses why lending rates should not now fall, and credit criteria should be relaxed. If not then it's time for the government to force them to do so - we own them now after all! Otherwise there's only one way forward in my opinion - remove the cash injections which the tax payer has made and allow some of these arrogant banks to collapse. Might well mean more short term pain for all but perhaps it is the only way to make take away the arrogance of the banks and make them realise this is not a game they can carry on playing and keep on making up their own rules.

    They have the liquidity now thanks to tax payers, they have massively lower cost of borrowing (now a 2% drop in just over 4 weeks). So no more excuses.

    Written by Charles Hallett

  • #2
    1.5% Bank of England rate cut!

    Think it will take a while for the effect of the cut(s) to feed through, but you would think the banks would all realise that the lower the mortgage rates the fewer payment / repossession problems they will have!

    Having said that what price for another housing price surge in a couple of years!
    Mark
    Bridging Loans | Property Development Finance

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    • #3
      LIBOR rate cut too

      Well the base rate cut has resulted in the 3 month LIBOR rate falling as well.

      Many of the lenders have already drastically reduced their SVR's and now that LIBOR has dropped hopefully we will begin to see some more competitive rates for new mortgage lending as well.

      The next couple of weeks should be interesting.

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