7
Jan
Interest rate decision 'the right choice' for the housing market
The Bank of England's decision to hold the base rate of interest at
0.5 per cent for the 11th consecutive month has been welcomed by
professionals in the property industry.
Robert Sinclair, director of the Association of Mortgage
Intermediaries (AMI) welcomed the rate hold.
He explained that the AMI considers the economic recovery to be
fragile, adding that the housing market is still vulnerable to any
shocks.
"Only if it is demand led should the committee use the interest
rate tool at this point in the recovery," Mr Sinclair
commented.
Ben Thompson, director of mortgages at Legal and General, predicted
that rates will not increase until 2011.
He stated that it is uncertain how this will impact the property
market and borrowers because "we've never seen financial
intervention on this scale before".
Mr Thompson also pointed out that over the coming 12 months,
inflationary pressures could change the housing sector
considerably.
Factors such as the quantitative easing package, rising oil prices
and the VAT increase could all contribute to upward pressure on
property values, he said. 