Rate cut to help new buyers

16-Nov-2007

The National Association of Estate Agents (NAEA) has welcomed the Bank of England's suggestion that it will cut rates twice in the new year in order to avoid an economic downturn.

The Bank published its quarterly inflation report earlier this week and hinted that two cuts would be forthcoming in 2008 as a precautionary measure, a move that the NAEA has said will benefit new buyers.

Such cuts could re-energise a first time buyer sector that has struggled to purchase property in 2007, the association suggested.

"The housing market has cooled and the past 12 months have left consumers looking for reassurance. A decrease in interest rates in 2008 will give consumers confidence and lead to a pick up in the housing market," said NAEA chief executive Peter Bolton-King.

But Mr Bolton-King did advise that a further rollout of Home information packs could affect this recovery.

The announcement comes as housing minister Yvette Cooper publishes the long-awaited Housing and Regeneration Bill designed to counteract rising house prices by making the construction of more affordable housing easier.

"The Housing and Regeneration Bill will help councils and Housing Associations build more homes. And it will bring together responsibility for land and money for new housing, alongside regeneration, to speed up the delivery of affordable housing and new communities," Ms Cooper confirmed.

"We owe it to future generations to act now on more, greener, and more affordable housing," the minister added.

Interest rates are currently at a six-year high of 5.75 per cent, but many analysts now believe that an initial rate cut will have materialised by next February at the latest.

Bank keeps rates at 5.75%Lower interest rates on the horizon for first time buyers

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