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4th August 2016
Hundreds of thousands of British homeowners have just had their monthly mortgage repayments reduced as The Bank of England announced earlier today that they are cutting interest rates from 0.5% to 0.25%.
Around 1.5 million mortgages track interest rates set out by The Bank of England and borrowers with tracker mortgages will immediately see an average cost cut of £22 a month.
The mortgage cut will not be experienced by everyone, as the drop only applies to those on tracker and other types of variable-rate mortgages whose rates may move in line with the Bank Rate.
Although the cut in rates means mortgages will become cheaper, it doesn’t necessarily mean getting one will be easier for first-time buyers. Andrew Hagge of moneycomms.co.uk, a research firm, told The Telegraph:
“While mortgages become more affordable and the cut will help those already in their own homes, it does little for those looking to take a first step on the housing ladder as a shortage of properties and [higher] prices are putting home ownership beyond reach for a growing number of people.”
The Bank also announced the biggest cut to its growth forecasts since 1993, reducing its growth prediction for 2017 from the 2.3% it was expecting in May to 0.8%.
The decision to cut interest rates was unanimous and marks the first change in interest rates since March 2009.
Lower interest rates are generally considered positive for borrowers but bad for savers.
The theory of a
Bank rate cut is that consumers see a cut in the amount they have to pay back
on accumulating debt and a worsening return on savings, which prompts them to
go out and spend more money, therefore boosting the economy in times of
unease.
At Maslen Estate Agents Ltd, we put people before profit. That means using our expertise to find the right home, or the right buyer, for you – our customer. For sellers, we use our unrivalled knowledge of the local area to ensure your property goes for the right price, to the right person. Our completion rate is one of the highest in Brighton & Hove thanks to our agents being some of the longest serving in the area. We know how complicated selling a home can be, so we offer plenty of advice on the selling process and making the most of your property. And we can provide a free, no obligation market appraisal. For buyers, you can browse houses for sale in Brighton and Hove and flats for sale in Brighton and Hove to find properties that suit any budget. Our handy buyer's guide will tell you nearly everything you need to know about buying property, and we'll be there for everything else. We're dedicated to finding the perfect home for you, taking you through the entire process – from viewing to completion.
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