Base rate cut is good news for Hertfordshire housing market
34 per cent of under 35s are saving for their first home - Credit: Getty Images/iStockphoto
The Bank of England’s decision to cut interest rates for the first time in seven years spells good news for house hunters in St Albans and Harpenden.
The base rate now stands at a record low of 0.25 per cent, while the Bank has also authorised a further £60bn of newly created money to buy government bonds, plus £10bn in corporate bond purchases and a new scheme to ease the funding costs of banks - potentially worth up to £100bn.
The Bank aims to prevent the UK from falling into recession, by offsetting the negative impact of the base rate cut on lenders’ profit margins and alleviating the risk of a reduction in lending to households and businesses.
Although the repercussions on mortgage rates remain uncertain, residential property group, Leaders, is predicting an increase in confidence and affordability within the property market.
Leaders’ national sales director, Kevin Shaw, said: “This cut can only be seen as good news for the property market as it will increase buyer affordability and help first-time buyers and those wanting to move up the housing ladder.
“The opportunity to secure a very low fixed-rate mortgage and be certain of mortgage outgoings for some time will give buyers greater stability and confidence and thereby stimulate demand.
“The cut will also be good for the buy-to-let market. Low interest rates and borrowing costs will increase the appeal of buy-to-let as an alternative to savings and other investments, which are simply unable to compete with the returns property can offer.
Most Read
- 1 Katherine Ryan and Romesh Ranganathan spotted filming in St Albans
- 2 Fire broke out at flats above row of shops in How Wood
- 3 From Levi's to Leyton Road: Superstar fashionista for over 50s back on shop floor
- 4 Meet the artist behind The Queen's Platinum Jubilee mural in St Albans
- 5 How the extent of cost of living crisis hit home at St Albans' CEX store
- 6 Suspected loan sharks arrested in Hemel Hempstead
- 7 Stalking Protection Order issued to Herts man after obsessive behaviour towards ex
- 8 Hertfordshire grandad who died in A6 Bugatti crash had a 'generous spirit'
- 9 Building company resurfaces bridleway to provide safe route for riders and walkers
- 10 BBC 5 Live football podcast recorded at 'Britain's oldest pub' in St Albans
“With rental yields of around 4-5 per cent – which are typical for a good buy-to-let – along with long-term capital growth prospects, investment in bricks and mortar is more enticing than ever.”
The Bank of England’s Monetary Policy Committee made the decision to cut the base rate following poor economic data in the wake of the EU referendum.
As we look towards Brexit, Leaders expects the market to remain resilient, as strong ongoing demand underpins house prices.