Lenders fail to pass on rate cut say National Homebuyers

A total of 78 per cent of lenders have not passed on the recent cut to the base rate of interest, potentially causing financial difficulties for many.

[UKPRwire, Fri Dec 28 2007] According to Moneysupermarket, only a fifth of lenders have passed the 0.25 percentage point cut on.

It comes despite borrowers waiting since December 6th for the change to be made.

As well as those who have not passed on the cuts at all, many lenders have opted to announce smaller cuts - doing little to alleviate borrowers' financial difficulties.

"It is very disappointing to see cuts of only 0.14 to 0.20 per cent being passed on in many cases," said Louise Cuming, head of mortgages at Moneysupermarket.

"At the start of December, the average SVR (standard variable rate) was 7.57 per cent. As things stand now, the average rate will only have fallen to 7.44 per cent by the start of January.

"The Bank of England decision to cut rates by 0.25 per cent was to try and boost the economy, but a cut of 0.13 per cent won't do that," he continued.

Fast cash for property expert Julian King adds, "The effect of the credit crunch will be felt for sometime as banks continue to be cautious over their lending criteria.

"Homeowners are still feeling the strain of interest rate rises through 2007 and the pressure doesn't seem to have abaited. Add to this the continued reduction in property prices across the UK and for some a quick property sale is the only available solution".

Mr King is a director of National Homebuyers, the UK's leading fast property purchase firm, guaranteeing to make an offer on any property in the UK, regardless of its condition or location for vendors who need a quick sale. The company also offers a Sell and Rent Back mortgage rescue scheme for homeowners who want to release equity in their homes.

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