The Bank of England has reduced the base rate by another half a percent to just 1.5% - the lowest rate in 314 years in an attempt to assist the economy. In the last two months there has been a cut of 2.5%.
This base rate cut is only going to start assisting landlords and homeowners once and if the rates are actually passed on to the customers. In theory those with tracker deals will see the rate cut passed on however those on standard variable rate deals must wait for a decision from their lender. While Lloyds TSB, HSBC, HBOS, Nationwide, and Skipton Building Society have already said they will pass on some or all of the reduction, most of the other lenders are currently saying their rates are under review.
Property investors are seeing the latest interest rate cuts reduce the cost of borrowing and therefore increase their returns. However, whilst interest rates have been steadily falling the amount of mortgages on the market is still low, with deposits to obtain reasonable rates still staying high. There have been comments that to increase the number of property transactions, the lenders are going to have to make more mortgage products available to customers.
If you would like to discuss property investment with CPS Homes then please contact one of our branches, and we will be pleased to assist and advise you. We are also able to refer you to a mortgage broker for specalist lending advice, or to review your current arrangements.