Interest Rates cut to 1%.

February 2009 saw interest rates cut to an impressive 1% by the Bank of England.

As recently as October (2008) interest rates were pegged at 5% but have fallen five times to the current level.

Whilst it's not necessarily great for savers it's very good news for borrowers who have seen their mortgage repayments fall.

It remains to be seen as to whether all the lenders in the market will reduce their own rates in line with the Bank of Englands.

There is a future possibility that rates may fall to zero.

From a house market perspective the big need still remains (JH) the need to get more first time buyers back into the marketplace.

I believe that will happen through a combination of falling house prices and increased Loan to Value lending by the Banks and Building Socities.

We have seen encouraging signs that the market's coming back to life... let's keep our fingers crossed that it continues !

Jon Hilton

05.02.09