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Rate hold 'no help' to FTBs
15 July 2008 11:00
The Bank of England's decision not to adjust the base rate last week will be of scant assistance to first-time buyers (FTBs), an online conveyancing specialist has warned.
On Thursday, the Bank's Monetary Policy Committee (MPC) voted to maintain the rate, which has not been altered since April, at five per cent, with its room for manoeuvre badly limited by rising inflation on the one hand and slowing growth on the other.
Yet Convex.net managing director Duncan Samuel has responded that this action will not aid people struggling to get onto the property ladder, with falling house prices offset by high mortgage rates and the need for buyers to provide at least a ten per cent deposit.
Looking forward, Mr Samuel asserted that, in light of the twin pressures it currently faces, the MPC seems to be adopting a 'wait-and-see' approach and he therefore forecast that the base rate would remain on hold over the coming months.
Latest Council of Mortgage Lenders data shows that lending to FTBs was down by 42.6 per cent year-on-year at £2.46 billion in May, with new buyers now coming up with a 13 per cent deposit on average, compared to an average of ten per cent a year previously.
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