4 December 2008

Bank rate cut by 2%

As the bank rate falls to its lowest rate since 1951, the big question is: will this kick start the UK property market?

On the evidence thus far - no.

It's not so much the bank rate that is causing problems in KBB-Land (although if the rate is passed on and loan rates reduce nobody will be complaining), its the fact that property transactions have slowed down because property prices continue to fall.

Many people commented on our round up of Chancellor Darling's PBR, that it was house price uncertainty that was the big problem.

While I feel slightly sorry for those caught in a negative equity situation, it is a temporary problem, prices will go up again.

One day.

That may not please those that bought a home to turn a quick buck but who cares? They were part of the problem.

The householder trapped in the small home the family is outgrowing is a different kettle of fish, and they do need help, and 2% interest rates are not it.

But for a large chunk of the population, those that have been in their homes for the last years and have no intention of moving, this is a great time to consider home improvements.

For those that would like to move to a bigger home, extending the present property may be a better solution, especially since of the relaxation in planning application procedures.

Once again, an extra 1% off the bank rate isn't going to make a lot of difference.

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