The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to increase the size of its asset purchase programme, financed by the issuance of central bank reserves, by £50 billion to a total of £325 billion.
In a November’s Mortgage magazine over half of mortgage advisers polled said they expected the base rate to stay at 0.5% until 2014 or longer as the global economic outlook darkens, while 34% said they expect an increase in 2013.
Last month the Centre for Economics and Business Research (CEBR) predicted interest rates to stay at 0.5% until 2016. Its other forecasts included inflation falling to 1.7% by Q4 and to remain around 2% thereafter, and for quantitative easing to increase to a total of £400bn over 2012.
Leeds Building Society have launched a two-year discount mortgage at 5.25% which is available up to 95% loan-to-value.
They have also launched a two-year discount 4.35% available up to 90% loan to value and a new two-year variable rate mortgage at a current rate of 5.89% up to 95% loan to value.
Eight weeks remain for first time buyers to complete their house purchases in order to avoid paying stamp duty land tax. The tax exemption will end on the 24th March 2012.
Stamp duty land tax will then be charged at 1% on all purchases between £125,000 and £250,000.
Don’t assume that “no news is good news” Please ensure you have returned and signed all your documentation to your Solicitor to ensure that they can complete the transaction before the 24th March 2012.
This is a tax charged on the purchase of a property and the amount of tax payable is dependent of the purchase price.
Property Purchase Price
£0 – £125,000 = 0%
£125,001 – £250,000 = 1%
£250,001 – £500,000 = 3%
£500,001 – £1 million = 4%
£1 million + = 5%
First time buyers
The first time buyer’s £250,000 threshold applies from 25 March 2010 up to 24 March 2012 inclusive.
There is no indication that this incentive will be extended.
HSBC has decided to restrict the number of conveyancers it uses to transact its mortgages.
The panel will consist of 42 firms, however customers will be free to use their own solicitor, although HSBC will still instruct a firm from the panel for its own legal work if they do so Customers will therefore be offered an incentive to use a solicitor from the panel.
HSBC only deal with customers directly, therefore using a local mortgage adviser to research the market and consider all your options and associated costs could save you money and save you trying to deal with two solicitors.
For impartial advice on mortgage products for purchase or remortgage direct deals or advised products, please give us a call on 01489 580020 or email your enquiry to info@parkgate.net
The Bank of England’s Monetary Policy Committee. Hold UK interest rates at their record low of 0.5%
Interest rates have not increased since March 2009.
Consumer prices inflation (CPI) peaked in September at 5.2% – more than double the Bank’s 2% target – and has since fallen to 4.8% in November.
The Bank of England’s Monetary Policy Committee have again today voted to keep the base rate at its historical low of 0.5% and have also decided not to increase quantitative easing, currently standing at £275bn.
Consumer Prices Index (CPI) inflation rate fell to 5.0% in October from 5.2% the previous month and although this is higher than the Government’s target, the instability of the worldwide economies continues to be the principal factor in the MPC’s decision-making.
Many economists now believe that the Base Rate will remain at its current level for the foreseeable future.
The Government has announced that it is no longer going to extend the stamp duty holiday for first-time buyers as it claims the policy has failed to increase the number of first-time buyers entering the market.
The Chancellor George Osborne has failed to extend the stamp duty holiday beyond its end date of March 2012, despite calls to do so from industry bodies such as the Council of Mortgage Lenders.
In the 2010 budget, then Chancellor Alistair Darling announced the stamp duty threshold would double from £125,000 to £250,000 for first-time buyers but announced an increase in the rate for properties worth more than £1m from 4 per cent to 5 per cent. The stamp duty holiday is due to end on March 25, 2012.
The autumn statement says: “The government is publishing analysis showing that the stamp duty land tax relief for first-time buyers has been ineffective in increasing the number of first-time buyers entering the market.
“This relief will therefore end on March 24 2012 as planned.
The Bank of England’s Monetary Policy Committee has decided to hold base rate at 0.5 per cent for the 32nd consecutive month and to hold quantitative easing at £275bn.
The last rate change was on March 5, 2009, when it was reduced from 1 per cent to 0.5 per cent. On the same day, the Bank of England initiated a £75bn quantitative easing programme.
The quantitative easing programme was increased to £200bn in November 2009 and then increased by £75bn to £275bn last month.
Minutes from the October meeting of the MPC showed all members voted for an additional £75bn of quantitative easing.
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