National Homebuyers: Rate cuts will have to wait

The Bank of England may be concerned about a downturn in the UK housing market and this is why interest rates will not be cut this year.

[UKPRwire, Fri Nov 02 2007] That is according to Barclays Stockbrokers, which also points out that problems in the US are still having an effect.

After the collapse of the US housing market following the sub-prime crisis, many UK mortgage lenders increased their rates.

This led to fears among homeowners in this country that the housing market here is set for a similar crash.

A cut in interest rates would help to relieve some of the pressure currently being felt by British homeowners, but Barclays Stockbrokers says that owners may have to wait some time for that.

"Recent UK consumer price data suggests that inflation is under control," said Henk Potts, equity strategist at the firm.

"Worries about the knock-on effects of a US slowdown, and a possible slowdown in the UK housing market… makes the Bank of England's stance look increasingly restrictive.

"But it is possible that the Bank of England will want to see some more broad-based evidence that the economy is slowing, before it takes its foot off the brake and cuts rates," he added.

Fast property sale expert Julian King of National Homebuyers says, "One would not expect an immediate rate cut, but one should also be aware that even a quarter point rise will be devastating for tens of thousands.

"We anticipate around 30,000 repossessions this year, a further rise in the base rate and this will escalate disproportionately. There are tens of thousands who face affordability problems every month. For many a quick house sale is their only option".

Mr King is a director of National Homebuyers, the UK's leading fast property purchase firm that guarantees to make an offer on any property in the UK for vendors who need a quick sale.

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