Wednesday December 19,2007
By Graham Hiscott Consumer Editor
MILLIONS of home owners can look forward to a happy New Year with interest rates set to tumble, experts predicted last night.
The Bank of England is expected to announce a quarter-point drop as early as next month.
And in a further boost for borrowers, industry leaders said rates may fall to five per cent or even lower by the middle of the year.
Bank bosses paved the way earlier this month by dropping the base rate from 5.75 to 5.5 per cent – the first cut since August 2005.
It is hoped another cut in interest rates will inject life into Britain’s flagging housing market. The global credit crunch, sparked by “sub-prime” borrowers in the US defaulting on their loans, has driven up the price at which banks lend money to each another.
House prices in this country have stalled in recent months as owners nervously await the outcome. Experts believe that the only way to bring down the wholesale price, and make home loans cheaper, is through at least one cut by the Bank of England.
Another cut in interest rates would bring much-needed relief to home owners battling to make ends meet.
Five interest rate rises since August last year have taken their toll on many families. Nearly a million households are now finding it hard to meet their repayments, the Bank of Engand revealed this week. A further 1.8million people say they have had problems meeting their repayments “at least occasionally”.
Some have been forced to take drastic action, with more than one million borrowers thought to be using their credit cards to cover mortgage or rent payments.
Source:
http://www.express.co.uk/posts/view/28884/Cheaper-loans-soon-for-millions |
