Townends Estate Agents Reacts to Bank of England Decision to Cut Base Rate to 0.25%

August 5, 2016
bank of england interest rate

Yesterday, the Bank of England made its first interest rate cut for more than seven years, slashing its base rate from its already historic low of 0.5%, which it has held since March 2009, to 0.25%. It is a move aimed at stimulating the economy after Britain voted to leave the EU in the referendum on June 23.

 As a result, homeowners are now being offered the cheapest ever mortgage deals. Rates on popular two, five and ten-year fixed rate deals have all fallen to record lows, in a boost to millions of borrowers. 

According to analysis from financial research firm Moneyfacts, the average rate on a two-year fixed rate mortgage has fallen to 2.48 per cent – the cheapest on record. This is down from 4.27 per cent five years ago and 2.68 per cent a year ago.  The fall in mortgage rates has dramatically cut the monthly mortgage bills for millions of households. 

 Those on ‘tracker’ mortgages – where the interest rate automatically goes up and down with the Bank rate – will also benefit from today’s rate cut.  Someone with a 25-year £250,000 repayment tracker mortgage paying two per cent interest will now see their monthly £1,100 repayment fall by around £30.

 “We have seen many first-time buyers already benefiting from low mortgage rates and being able to enter the market, and a drop in rates will provide an additional boost for those who have been sitting on the fence and holding off making a property purchase decision,” said Séamus Kavanagh, CEO, Townends Estate Agents. “We welcome the Bank of England’s well timed decision and see this as a positive move to support the housing market generally and we envisage seeing a steady improvement in transaction volumes on the back of today’s interest rate announcement.”   

townends.co.uk

Christopher Walkey

Founder of Estate Agent Networking. Internationally invited speaker on how to build online target audiences using Social Media. Writes about UK property prices, housing, politics and affordable homes.

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