photo credit: robertsharp
A degree of relief has been brought to some UK property investment businesses after the Bank of England cut interest rates by 0.5 per cent.
Wednesday’s sweetener arrived after a £400 billion rescue plan was unveiled for the British banking system amid what the Treasury called “extraordinary” financial conditions.
By Thursday morning many stock markets had opened in a more positive mood, with the FTSE 100 up 2.36 per cent.
The interest rate cut was co-ordinated with rate reductions in other countries, with the US Federal Reserve trimming rates by two per cent to 1.5 per cent, and the European Central Bank also making a 0.5 per cent reduction.
Reaction to both the new funding and the raft of rate cuts was positive from all areas of the property investment market.
David Bexon of SmartNewHomes.com said:
“The 0.5 per cent drop in interest rates offers a double whammy of good news and a more direct boost for homeowners and potential homebuyers, following the banking rescue package.”
Other property investment-related groups broadly welcomed the £400 billion banking handout.
Council of Mortgage Lenders director general Michael Coogan said:
“The flow of funding to support mortgage lending has been severely constrained, and these measures will help to create more positive conditions for the mortgage market.”
Earlier this week the UK’s Financial Services Authority also announced all UK customers would have their bank deposits guaranteed to a limit of £50,000, up from £35,000.
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