National Homebuyers: 'Lenders still not passing on rate cuts'
Many people are suffering from financial difficulties because lenders are still not passing on cuts to the base rate of interest.
[UKPRwire, Tue Mar 04 2008] That is according to Capital Economics, which said there is no sign of the trend coming to an end any time soon.
It comes after the Bank of England's Monetary Policy Committee (MPC) chose to cut the base rate of interest in December and February.
The two 0.25 percentage point reductions should have offered some relief to those in financial difficulties but Capital Economics pointed out that this has not necessarily been the case.
"Looking at the money markets at the moment, it seems to be a continuing problem. The money markets rates have actually risen since the Bank cut their base rate in February, whereas normally you would expect to see them fall sharply," said Paul Dales from the firm.
"There does seem to be a kind of stickiness in that lever of bringing monetary policy to the markets and then the economy.
"It's not that monetary policy is now impotent, itís just maybe a bit less effective than before," he added.
Fast property sale expert Julian King adds, "Homeowners facing financial problems and even the threat of repossession need to be aware that solutions exist to help them.
"Mortgage rescue schemes like Sell and Rent Back allow the homeowner to sell their property for up to 100 per cent of its full market value and rent it back on a secure tenancy agreement."
Mr King is a director of National Homebuyers, the UK's leading Sell and Rent Back provider. He is also a founder of APBA [Approved Property Buyers Association] which is calling for regulation in the quick house sale and Sell and Rent Back industries.