Bank of England holds interest rate at 4.5%

The Bank of England has held interest rates at 4.5% for the tenth month in a row.

Assetz has praised the Monetary Policy Committee for deciding to maintain interest rates and believes there will be no change until 2007.

Managing director Stuart Law says: “The MPC has made absolutely the right decision in holding interest rates and I would not expect to see any change now until 2007, when a 0.25% rise is probable.

“The current economic situation is not strong enough to justify a rise in rates.

The housing market is stable and showing positive overall growth, but it is closely tuned with interest rate movements.

While investors would probably take it in their stride, even a quarter-point rise would cause a substantial change in homebuyer attitudes and put another nail in the coffin of the beleaguered first time buyer.”

John Heron, director of mortgages at Paragon, says: “Landlords and the buy-to-let sector generally will warmly welcome the decision to hold rates, and indeed the increasing likelihood that rates will be held for the foreseeable future.

In recent research by Paragon, landlords said that low and stable interest rates were the most important factor incentivising them to invest in rental properties, mentioned by 46% of them.

Similarly, 39% of landlords reported that rising interest rates were the most likely factor to discourage them from investing.

The MPC’s decision will be applauded by the private rented sector and indeed by the growing number of tenants who rely on it for their accommodation needs.”