Further interest rate cuts needed from Bank of England state RICS
October 3, 2008
According to officials from the Royal Institute of Chartered Surveyors the Bank of England needs to apply further interest rate cuts to the base rate in order to help avoid a similar house prices crash as was seen in the 1990s.There are have been a number of predictions with regards to how serious the house price drops will be this year, and one industry professional recently gave the gloomiest prediction yet, stating that house prices could fall by an average of £50 a day, or by over £18000 over the year.
One official from the Royal Institute of Chartered Surveyors stated: ‘The Bank of England may have to cut rates further if the market is to remain stable.’
An estate agent said that that whilst the interest rate cut in December had been a welcome one, further action was needed sooner rather than later. He said: ‘The quarter point reduction was welcomed but we need more to follow in the New Year if the early 90s property recession is to be averted. If we don’t, the country can expect a bleak time for the next two to five years.’
Many industry professional as well as homeowners are now waiting with bated breath for the results of the February Monetary Policy Committee meeting after which it is widely expected that the Bank of England will announce another cut in interest rate rises. There are predictions that the base rate could fall twice by the time summer comes around, and that the rate could fall as low as 4.5% or under by the end of this year. This could help to ease financial strains for households stated one agent, adding: ‘Home Information Packs plus Christmas plus interest rates plus credit crunch equals hard times.’
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