photo credit: markhillary
Mortgage lending groups have called for more government action after interest rates were cut to just 1.5 per cent by the Bank of England.
The Council of Mortgage Lenders said some home owners would see little difference as many tracker loans were reaching their ‘floors’, below which a bank will not lower rates.
The Association of Mortgage Intermediaries (AMI) also said the housing market would need greater liquidity if it was to truly recover.
The AMI said: “While not inconsequential, the Committee’s decision will have little impact on the real problems faced by the mortgage market.
“In order to do so the Bank and the Government must tackle the burning issue of a lack of liquidity. This is what now holds back the housing market and it will not be solved by a further cut in the base rate.”
The Royal Institution of Chartered Surveyors (RICS) also said the move was unlikely to improve the availability of home or business finance.
First-time home buyers are still struggling to get the finance to take their first steps onto the housing ladder, the group added.
The level of home repossessions will increase if potential home buyers continue to be frozen out of the housing market, RICS warned.
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