Countrywide comment on Bank of England base rate decision


Thursday, June 9, 2011

Commenting on the today's base rate decision by the Bank of England, Grenville Turner, Chief Executive of Countrywide, the UK's largest property services Group said:

"The decision by the MPC to maintain the base rate at 0.5 percent this month is the right decision. The question is how long this will continue, which remains uncertain.

"We still anticipate a base rate increase by the end of the year of possibly 0.25 percent, however I will not be surprised if economic pressures push this into Q1 of 2012.

"Interest rates will inevitably go up at some point, as the UK's largest mortgage broker the feedback we get is that the biggest dilemma for borrowers remains whether or not to opt for a fixed rate mortgage. We have seen a growing number of borrowers opting for fixed rate mortgages in the first half of the year. In May 2011, 83 percent of all applications were for fixed rate mortgages, in May 2010 the figure was 65 percent.

"Whilst there is no significant sign of improvement in the volume of transactions, we are seeing an increase in regional variations in transaction levels with London and the South East continuing to see higher level of activity than the rest of the country. The market remains tough and the dilemma for the Bank of England is that the longer they delay increases in interest rates the more aggressive they are likely to be when they arrive".


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