Mortgage rate cuts, what will it mean for the housing market?

The Bank of England cut the interest rate by half a percent on Wednesday we ask: what does this mean for the housing market, will it be enough to restore confidence and will the banks pass the rate cut onto the public.

Presently one building society and seven banks have cut their mortgage rates in response to the bank of England base cut. Halifax announced it will cut its Standard Variable rate (SVR) to 6.5 percent from 7 percent, as will NatWest, Bank of Scotland, First Direct, Woolwich and Lloyds TSB will cut their SVRs by half a percent on November 1.

The cut will help four million homeowners who have existing Tracker mortgages and the mortgage availability should improve due to the governments rescue plan. However it’s likely that some banks and building societies will cut the rates on their saving accounts to.

Although the property market isn’t expected to improve overnight, it is a move in the right direction and should be geared towards improving consumer confidents and to get people spending again, although we do imagine people to keep their money belts firmly fastened and eyes glued to the market over the coming months. Times are tough but let’s hope we are seeing the light at the end of the tunnel.

Source: channel4