View more on these topics

MAB welcomes base rate cut

The Bank of England has cut the bank base rate from 5.25% to 5%.

Brian Murphy, head of lending at Mortgage Advice Bureau, says: “The decision to reduce the base rate by a quarter point in April will not have been an easy one for the MPC to make. However, it is a necessary response to current economic growth concerns in the UK and has been widely anticipated by forecasters who are strongly aware of the sense of nervousness throughout the business community.

“With the CBI and now the IMF forecasting economic growth below that of the Chancellor’s original calculations, this worrying prediction means it was imperative for the MPC to act in order to avoid the economy stagnating.

“In addition, an injection of liquidity into the market is urgently needed to allow businesses to borrow for investment purposes, to encourage a higher level of consumer spending and instil some much needed confidence particularly within the housing market. Interest rates however do need to be controlled to keep a lid on inflation which is running ahead of the Government’s own target level of 2%.

“As with previous rate cuts, the main winners will be those on existing tracker deals. We may not see all of the reduction passed onto new borrowers in the pricing of new mortgage products as lenders continue to manage their volumes, increase their margins and reduce their risk exposure.

“I do not think that we have seen the last of the rate cuts for this year and would expect a further base rate decrease but unless there is a real deterioration in the economic outlook we may have to wait until the second half of 2008.”


Chelsea to reprice sub-prime range

Chelsea will be withdrawing its currennt sub-prime Prospect range from close of business today.It will be introducing new sub-prime rates via Prospect tomorrow.The rates will be available on the website from Tuesday morning. All other Chelsea mortgage products remain unchanged.Prospect applications on the current range must be submitted by 5pm today to secure the rate.

NR processors may face axe

Northern Rock staff processing further advances and remortgages could become victims of the bank’s redundancy programme, the bank’s former finance director claims.NR, which was nationalised in February, plans to reduce its 6,000-strong workforce by around 2,000 by 2011.Although an NR spokesman says it has not yet been decided which departments will be affected, Bob Bennett, […]

House prices static in February

The Land Registry says house prices in England and Wales remained static during February, with the average price standing at £185,616. Prices in London fell by 0.4%, with average house prices dropping to £353,760. But at 10.6%, annual growth in the city remains higher than in any other region. The West Midlands experienced the highest […]


News and expert analysis straight to your inbox

Sign up