20090408 April MPC announcement comment

PRESS INFORMATION 9 April 2009 Base Rate Held at 0.5% in Least Eagerly Anticipated MPC Decision for Months… The UK’s Bank of England Monetary Policy Committee (MPC) has opted to hold the current base rate at 0.5%. Neil Young, CEO – Young Group, believes that the Bank of England’s rate setting committee is prudent in maintaining the current base rate; “The MPC has acted decisively in recent months in a bid to stimulate the economy and lending markets, but we now have to assess the impact of those measures. The effects will not be felt overnight, so it comes as no surprise that the MPC has opted to take a ‘wait and see’ stance this month.” Inflated Margins Lenders are still not doing enough to pass on the benefits of an all time low base rate to the man in the street via their mortgage products; “The margins that mortgage lenders are receiving are still significantly inflated. The treasury is quick to point out the value of stimulus that it has provided, but much less fast to acknowledge that the treasury-owned lenders are sitting on the benefit as a result of their inflated margins.” Neil Young, CEO – Young Group. Residential Divide Disappointingly, lenders are still placing a premium on Buy-to-Let mortgages over and above residential products. Neil Young explains: “Rates on buy to lets are still higher than residential mortgages and the arrangement fees are commonly between 1% and 3.5% of the loan amounts. For example at a loan ...