Existing self builders to be helped by 'interest rate shifts'

A leading economist has claimed that many people with a self buildmortgage will benefit from the Monetary Policy Committee's recent interest rate cuts.

The 1.5 per cent base rate cut last month has reportedly showed that the committee's focus has switched to deflation and away from the prospect of inflation.

Self builders who took out base-tracker mortgages will already be benefiting significantly from the Bank of England's 2.75 per cent worth of base rate cuts since December 2007, according to Nationwide's chief economist Fionnuala Earley.

Most of those who took up a standard variable rate from a lender will also be better off, she said.

Although anyone who embarked on a self build and opted for the security of a fixed-rate deal will not see any immediate benefits of the recent cuts, when they come to the end of their deal, Ms Earley suggests they will be faced with much less of a "payment shock".

Meanwhile, Skye Homes founder John MacDonald told the Herald that the housing market could be galvanised by adapting elements of self build into property construction projects.