Peter Rollings commenting on the Bank of Englands decision to cut interest rates this morning
Thu 08 Jan 2009
Never look a gift-horse in the mouth, but the vast majority homeowners will never feel the benefit of this cut. Banks simply arent passing these cuts on. While it will have a positive impact on sentiment, vital at the moment, interest rates mean very little if you dont have a large deposit in London, house prices are still high enough that a 25% deposit is a fortune for a first time buyer.
The base rate cut is a further step in the right direction, but if were to see even a mild improvement in the number of people able to afford to move home the government must start acting to thaw the mortgage freeze. Banks cant lend because they have no money to lend the government promised us action in November. The action weve seen to date is simply not enough.