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Interest rates cut from 3 per cent to 2 per cent
The Bank of England has cut UK interest rates from 3 per cent to 2 per cent to help boost the economy. This will allow many homeowners to release equity in their property...
The Bank of England has cut UK interest rates from 3 per cent to 2 per cent to help boost the economy. The action by the Bank’s rate-setting Monetary Policy Committee (MPC) follows on from last month’s surprise 1.5 percentage point rate cut. They are now at their lowest level since 1951.
Rajesh Agrawal from RationalFX comments, “Once these cuts are passed on to the consumer by the banks it could reverse the recent trend of falling house prices. Many homeowners in the UK may look to release equity in their property and reinvest elsewhere as the UK market has fallen more than the European market.”
He continued, “With France being so accessible nowadays it is one area that could really benefit from the UK turnaround. Northern France in particular could reap the benefits of the UK market picking up and exchange rate negatives could easily be outweighed by the projected jump in prices.”
The move by The Bank of England will save anyone on a £ 200,000 tracker-rate repayment mortgage just over £100 a month. Someone on an interest-only mortgage would save even more.
Karen Tait, Editor of French Property News said, “Those people who dream of buying a French property, but who are worried about getting a mortgage, should consider a French euro mortgage, still available at good rates and with many advantages.”
Karen continued, “Another option for anyone worried about their finances is a deferred payment mortgage - meaning they don't have to put their dream French property on hold. There are some real property bargains in France at the moment, so people in a position to buy now may well find they can afford a property that would have been out of their reach a year ago.”
Some lenders, including Lloyds TSB have already announced that they will pass on the full cut to borrowers on standard variable rates.
David Mbaziira from Currencies Direct Limited commented, “Cuts such as these suggest that the UK is prepared to take decisive action to revive her fortunes and the ECB are trying to stave off the inevitable. Taking this sort of action now means UK buyers will begin to reap the benefits of an improving pound as we enter the traditionally more buoyant early spring season.”