This morning the Bank of England monetary policy committee has held the base rate at a record low of 0.1%.
Industry experts comment on the Bank of England base rate decision and quantitative easing. David Ross, the Managing Director of Hometrack said:
“While there are some negative economic headwinds it’s encouraging to see the Bank of England maintain this historically low interest rate. This, combined with the Stamp Duty holiday, will ensure demand for mortgages remains high however, with fewer products now available, it’s increasingly clear many potential home-movers will miss out.
“The impact of COVID on the economy is still not fully clear but the increased QE will help increase spending. We are still some way from the introduction of a negative interest rate but these remain an option for the Bank who could use these to stimulate borrowing and the wider economy next year.”
Simon Gammon, Managing Partner, Knight Frank Finance further commented:
“The Bank of England would clearly like to hold borrowing costs lower for longer in an attempt to spur economic growth, but the cost of mortgages is likely to keep rising while lenders are being swamped with new applications.
“There were more mortgages approved for house purchase last month than any time since October 2007 and the surge in property market activity is showing few signs of slowing. As a result we’re seeing a huge variety in borrowing costs from lenders, depending on their volume of work and appetite to lend.
“The government’s decision to keep the property market open during the second lockdown was a sensible move and will prevent the market from clogging up ahead of the end of the stamp duty holiday this coming March.
“However any borrowers that want to take advantage of the SDLT holiday should start the home buying process as soon as possible, because there is currently pressure on all parts of the property buying process, whether that be among solicitors or conveyancers”
