Rate cut not enough, suggests CML

The Bank of England has announced it is cutting the base rate from 5.25 per cent to five per cent, but an expert has said this will do little to improve the mortgage market.

In its announcement today, the monetary policy committee (MPC) stated it had been confronted with a decision based on the assessment of which risk to inflation - that of it spiralling upwards or dropping below its target - was most under threat in the medium term.

Having drawn its conclusion, the MPC stated: "The balance of these risks to the inflation outlook in the medium term justifies a cut in Bank rate this month."

However, the change will not be enough to improve the mortgage market much expect for those on tracker deals, Council of Mortgage Lenders director general Michael Coogan has argued.

Mr Coogan stated that the "dysfunctional" nature of the current market meant that the base rate was not a guide to "the cost or availability of funds to lenders".

Those unable to get a good mortgage may consider the self build option as a different way of getting on the housing ladder.


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