Bank of England cuts 'could relieve househunters'

Further cuts in the base interest rate by the Bank of England may serve to relieve the strain on people who want to buy a house in Scotland. So claims John Charcol, which states that, despite the fact that the Treasury has predicted a 2.25 per cent growth in 2009, the Bank may make cuts in order to ease the pressure on mortgage lenders. Katie Tucker, spokesperson for John Charcol, explained that homeowners and people looking to buy Scottish property, as well as houses elsewhere in the UK, should hope for another Monetary Policy Committee (MPC) cut. She said: “Cash-strapped homeowners will be relieved to know that some relief to their purse-strings may still be due, as mortgage lenders’ own cost of borrowing is high and a further bank rate cut may be used to relieve this.” The MPC recently decided to maintain the base interest rate, keeping it at 5.25 per cent; however, Bank of England governor Mervyn King admitted this week that a further reduction is a possibility.