Rate decision signals first-time buyer stability, says specialist

05-Jun-2008

The Bank of England's decision to hold interest rates at five per cent heralds a period of stability for first-time buyers, it has been suggested.

Commenting on today's outcome, the managing director of first-time buyers' portal FirstRungNow.com said "low-ish interest rates" mean mortgages are not significantly more expensive than last year.

This, coupled with the fact that property prices are now stabilising, reassures buyers that "there is no rush" to get on the property ladder, according to Helen Adams.

"However, the reluctance of mortgage lenders to lend first-timers as much as they used to means that many will only achieve their home-ownership goals if working with their parents, either for help with the deposit or some sort of co-financing," continued Ms Adams.

Financial analysts had predicted that the Monetary Policy Committee would leave rates untouched today, after an almost-unanimous decision to hold them last month and warnings about imminent higher inflation.

Some economists, however, have speculated that rates will stand at 4.25 per cent by the end of the year, which may encourage lenders to pass cuts on to borrowers and further ease first-time buyer difficulties.

FirstRungNow.com - how to buy a house, from finding your first flat or first house, first time buyer mortgages, shared ownership, buying with friends, gifted deposit, part buy part rent - all a first time buyer could possibly need.

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