UK interest rates held at 0.5%

Many property investors can continue to breathe a sigh of relief after the Bank of England once again held UK interest rates at a record low of 0.5% for the 38^th consecutive month, ensuring that mortgage borrowing levels will remain relatively low.

Rates have been at 0.5% for three years, despite higher than anticipated inflation. In March, the Consumer Prices Index (CPI) measure of inflation stood at 3.5%, which is above the Bank of England's target rate of 2%.

“With the UK in a technical recession and a number of indicators pointing towards a weak economy, it is not surprising that the Bank of England have decided to hold base rates at 0.5%,” said Grenville Turner, group chief executive of Countrywide, the UK's largest estate agent and property services group. “We would expect base rates to move upwards once signs of any improvement in the health of the UK economy are evident.”

But despite interest rates remaining at a record low, deposit affordability and mortgage accessibility remain the toughest hurdles for potential buyers and homemovers to overcome.

“These ever present hurdles are having an impact on the housing market and the number of house sales that will be completed this year,” Turner added.