The Bank of England decided to keep interest rates on hold at 0.50% again this month, meaning the cost of borrowing has been left unchanged for the third consecutive month.
Base rates are now expected to remain at historically low levels until 2010 at the earliest, with a rise to coincide with strengthening demand growth.
James Thomas, Head of Residential Development and Investment at Jones Lang LaSalle, says: ‘There are tentative signs that the pace of decline in house prices is beginning to moderate. The three-month Libor rate, on which most mortgages are based, has fallen from 1.45% at the beginning of May to 1.28% now. The fall suggests that liquidity is starting to come back to the money markets which will hopefully feed through to mortgages.’
‘However, it is still too early to suggest that the housing market has bottomed out. Mortgage approvals are still down – the latest statistics from the Council of Mortgage Lenders show that total mortgage lending fell to £10.4bn in April from £11.4bn in March. Furthermore, rapidly rising unemployment and limited access to credit continue to weigh on the housing market.”
UK commercial property.’
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