Rate cuts 'yet to be passed on to first-time buyers'
Published On 19 February 2008
Financial experts have predicted that the February interest rate cut will do little to improve mortgage affordability for many consumers.Data released by Moneyextra.com showed that house prices rose just 1.41 per cent year-on-year in January, down from a rise of 1.85 per cent in December.
The study added that size of the average mortgage being sought by all homebuyers fell marginally during the month, dropping by £740 over the year and down by 1.97 per cent on the month.
Typically, people needed a mortgage of £135,051 to get on the property ladder.
"December's cut in base rate has yet to be reflected in the housing market with many lenders dragging their feet in reducing their mortgage rates before Christmas," commented the site's senior editor, Robin Amlot.
"Will February's further rate cut have any real impact on the weakening housing market? It seems unlikely."
Mr Amlot added: "The outlook for the property market for 2008 remains subdued. Prospective first-time buyers needn't rush to buy - there are likely to be bigger bargains to be had in the months to come."
Recent figures showed that an increasing number of people in the UK struggled to make mortgage repayments in 2007 and had their home repossessed.
