Mortgage rates are 'to fall further' according to the Bank of England.
The Bank kept interest rates at 0.5% and indicated that banks and building societies expect mortgage rates to fall further over the coming months. In it's credit conditions
survey, the Bank said borrowing rates for homeowners fell in the first quarter of 2013, for the third quarter in a row.
Lenders also predicted that rates will continue to go down over the next three months. The Bank said one reason was increased competition. Christian Harper of Chiswick estate agent OliverFinn, says that a reduction in
mortgage rates will offer some short term support for buyers who are basing their spending power on affordability.
Chiswick property
"The flat market could certainly do with a shot in the arm. Apartments are taking 50% longer to sell than most houses. This is based on my own 2013 survey across all the estate agents in Chiswick.
“Without wanting to sound negative I fear that unless banks ease on lending criteria and/or reduce demands on deposit sizes, this predicted movement may have no effect on the market. It may only provide existing property owners with further relief regarding their already ridiculously low monthly payments" says Harper.
"Owners will either continue to make overpayments on their mortgage or simply make further reservations in one of W4's sixty eating establishments!"
Many lenders also reported that the government's Funding for Lending
Scheme (FLS) was making it cheaper for them to borrow money, which in turn made it cheaper for customers to borrow from them.
But even though mortgage rates are getting cheaper, the number of people taking out loans has been falling. The Bank reported that the number of mortgage approvals for February was the lowest since September 2012
