Other Posts by Michael Aglony

• Data indicates property market progress!
• Improved Funding for landlords
• At last - Funding for HMOs, Freehold Conversions & Limited Companies returns! 23.07.2009
• Increase in fixed rates as "perceived" inflationary pressures start to build. 22.06.2009
• Survey's report increases in house prices - 15.05.2009
• Base Rate stays at 0.5% for a second month - 07.05.2009
• Base Rate remains unchanged at 0.5% - 09.04.2009
• As the market bottoms out, now is the time to secure that property bargain - 03.04.2009
• The Turner Review may impact Buy to Let warns Lord Turner
• Now that Base rate has dropped to 0.5% it's time to fix!
• Northern Rock resumes lending - what will be its impact?
• Will everyone benefit from the 0.5% Base Rate cut?
• Bank Base Rate now seems set for 0.5% cut on Thursday
• B&B appoint Mortgages for Business for early repayment charge clients
• It looks like Bank of England Base Rate could drop to 1% next week
• Will Base Rate stay below 5% in 2009?
• It's all about cashflow!
• Mortgage Express are waiving all Early Repayment Charges!
• SWAP rates and LIBOR rates on the move in 2009 - 13.01.2009
• Bank of England Base Rate cut by 0.5%. How will this effect Buy to Let? - 08.01.2009
• Market awaits Year End movements at Banks
• Merry Christmas and here's to a better 2009!
• 3 month LIBOR continues to ease slowly - 16.12.2008
• LIBOR, SWAP rates, base rate and interest rates - we're seeing history being made - 11.12.2008
• Base Rate reduced to 2%
• The return of Buy to Let as a commercial transaction

 Print

So what's next after Base Rate is held at 0.5% again?

By Michael Aglony

A Reuters Poll of 53 economics units (including the main banks) in January disclosed a wide range of views on where BBR will be at year end - RBS - 0.5%, LBG - 0.5%, BCL - 1.5% and HSBC - 2%. The median result was 1% but the median for the end of 2011 was 2.5% so inflation in 2011 was recognised as a challenge but then SWAP rates were generally higher.

Since then confidence about recovery has wained and SWAP rates have trended down to their lowest since the start of the credit crunch. Across the pond the Fed has made it clear that they will hold rates down for a sustained period post the first signs of recovery and here economists are muttering that whilst cuts in governement spend, especially bureaucaracy and fringe projects, are needed, too much panic cutting may not be such a good idea.

QE is halted for the time bieng - last monies due out in March - and it would be a sign of greater problems if new amounts were released in Q2.

The upshot of this is that confidence remains fragile and that lending margins may ease slightly if lenders fail to achieve new lending targets on the margins they have been able to charge over the past 9 or 12 months.

For those looking for Buy to Let mortgages there is slight movement and improvement so all is not lost!

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