Interest rate cut 'will support housing market'

09-Oct-2008

The interest rate cut announced yesterday by the Bank of England could be good news for first-time buyers attempting to get on the property ladder.

It will provide some support to the housing market, according to the Building Societies Association (BSA).

The monetary policy committee cut the rate by 0.5 percentage points to 4.5 per cent, a day earlier than the decision was due.

It will help mortgage borrowers on variable rates, the BSA explains.

Meanwhile, comma the Royal Institution of Chartered Surveyors (Rics) says: "The dramatic response from the authorities is an appropriate response to the chaos in financial markets over the past few weeks and the global economy's slide into recession."

It adds that the move will help to bring confidence in the market but said more action might be necessary in the coming months.

Rics predicts that the base rate will fall to 3.5 per cent by the middle of next year and that house prices will continue to fall and borrowing costs will become lower.

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