The Bank of England's Monetary Policy Committee (MPC) needs to cut bank base rates by 0.5% by early summer to boost the struggling mortgage market.
Interest rates need to be reduced from 5.25% to 4.75% by early summer. That would help matters. It will make things slightly easier for consumers and the housing market.
The move should reduce borrowing costs and help borrowers become more optimistic.
Confidence in the mortgage market is rapidly slowing and was dented further in the Budget, where the Chancellor failed to throw any life lines.
Indeed Solution Mortgages Sales Director Scott Morrissey said “At the current time lenders are actually putting rates up while interest rates have been coming down. Only a cut of 0.5% over the next few months should be enough to see the reduction in rates passed on to borrowers. In all my years involved in mortgage sales, I have never seen it so bad”.
However Solution Mortgages are still managing to complete mortgage business for customers and even though the number of options available have dwindled, the fact that we have underwriters from the lenders we use in house, we are still able to maintain excellent service times and complete business for clients. In fact last month was our best month for completions since October 2007 and helped contribute to a profitable first quarter for us.
Despite this the problems still remain and as the housing and mortgage finance market is critical to the well being of the economy. There needs to be some action.