Interest rates could remain on hold

The governor of the Bank of England has suggested that interested rates may not be going up in the near future inflation remains low. In what will be welcome news to all homeowners base rates could remain at the record low of 0.5% until next autumn.

The latest forecast comes as the worldwide recovery appears to be faltering and the recovery is at best sluggish. Commodity prices have fallen drastically with the price of oil now at levels not seen for many news. All of this is good news as far as inflation is concerned as it is widely expected to fall below 1% which is good news for those of us that have mortgages.

November Inflation Report

Mark Carney said in his November inflation report that interest rate rises look less likely now than in August. This news will be welcomed by the government who will be keen to see rates stay where they are until they get the election out of the way. It is a further boost to David Cameron who will be able to tell the electorate that the Conservatives economic plan is working.

Mark Carney will also be happy to see that the housing market appears to be cooling down as there have been many calls from so called experts to put interest rates up to take the steam out of the property market. It would seem that the governor has been proved right by sticking to his guns and leaving rates where they are instead of pulling the plug on the housing recovery.

House Prices Remain Steady

Whilst the property market appears to have calmed down this can only be good news as trouble was just around the corner if prices had continued to rise. It would seem that buyers are now waiting to see if prices will come off a little until the spring arrives whereby we will no doubt see some of the recent property market return. The main reason the market has come off the boil is because the Bank of England has made it much harder to get a mortgage by introducing new stringent rules for borrowers.

The only problem is that this has had the affect of stopping professionals on good salaries buying homes because they can't tick all of the boxes. If this continues and good buyers remain locked out of the market the \bank will face calls to change the current rules so that buyers with good credentials can get on the property ladder.