Rate cuts 'had no impact'

First-time buyers and remortgagers have seen little or no positive impact from the Bank of England's recent interest rate cut as rates have remained almost as they were, mortgage brokerage John Charcol has said.

Spokesperson Katie Tucker commented: "The connection between Bank rate and Libor has become elastic, and a pull on one end provides no effect on the other."

Because of this and the very limited impact the injection of another £15 billion into the market has had, the action taken by the Bank of England has done little to raise the prospects of lower mortgages except for those on trackers and the cases where standard variable rates have been lowered.

The main pain will be felt by new borrowers or remortgagers who have to pay higher rates, the firm concluded.

Such news may prompt some to consider the self build option to get on the ladder or renovation as a means of improving or extending their existing living space.

The latest cut, the third in five months, was by 0.25 per cent, bringing the base rate to five per cent.


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