Base rate cut alone not enough, says NAEA

The National Association of Estate Agents (NAEA) has said a cut in interest rates this week would not be enough to restore confidence in the mortgage market on its own.

NAEA chief executive Peter Bolton King said: "People are losing confidence because they are unable to secure mortgages - especially first-time buyers, who are also being scared off by the feeling of instability."

He said that action by the Bank of England's monetary policy committee at its monthly meeting would help, but that alone would not be enough.

In addition to such a move, it was "imperative" for the banks themselves to play their part by cutting interbank (Libor) lending rates.

However, Hemscott reports, the Libor rate has remained persistently around the six per cent mark recently.

This may indicate that any hoped-for reduction in the cost of interbank lending - and consequently that of mortgages - will not materialise for some time yet.

In such circumstances those hoping to get on the housing ladder may seek to self build rather than looking for a mortgage.


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