Interest Rate Ease Looks Set to Benefit Homeowners

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With interest rates having remained steady for the last five months Greenhill Finance says there are now optimistic signs of an easing of interest rates that could soon see the start of a return to more affordable loans and remortgages for homeowners.

Fact: Interest rates have remained the same since April 2008 and experts are now predicting a decrease in 2009.

An end might be in sight to the 'credit crunch' and economic downturn that has dominated the news for much of 2008 and depressed the housing market with its corresponding effect on borrowing.

Talk of a recession has encouraged the Bank to England to maintain its base interest rate at a level that has kept overall interests rates high - good for investors but not so good for borrowers.

But a growing mood of optimism is now being detected, with a number of experts saying that Britain should follow the American example and drop interest rates to stimulate both the housing market and economy generally.

The result, says Greenhill Finance, is that lenders are starting to get behind the fact that interest rate rises are behind us and are looking for a competitive edge by cutting interest rates on loans and remortgages.

Among a number of leading UK experts confidently predicting a return to lower interest rates in 2009 is the British Chambers of Commerce (BCC) and Greenhill Finance, one of Britain's leading finance brokers, is optimistic that the days of more affordable loans and remortgages are on the way back.

BCC forecast that interest rates will be cut over the next six months to help counter the effects of the credit crunch, while two other independent financial commentators also predict an easing of the economic downturn in 2009.

BCC economic adviser David Kern was quoted on Aug 18 as saying that UK bank rate 'will be cut to 4.75% in quarter four (Oct-Dec) 2008, followed by an additional cut to 4.50% in quarter one (Jan-Mar) 2009.'

Property expert and presenter of Channel 5's 'How to Be a Property Developer' Gary McCausland also believes a cut is due.

'A positive rate cut of at least one per cent would go a long way to underpin the UK's struggling economy', he said.

More recently, prominent analyst and government adviser Tim Congdon, who set up Lombard Street Research, too confidently forecast that oil prices will come down next year.

This, he said, could produce an inflation figure of less than one per cent by autumn 2009, leading to a significant decrease in interest rates.

All this is good news for consumers, particularly those with equity in their homes and who wish to borrow.

Greenhill Finance has been prominent among those who have poured scorn on talk of recession, pointing out that the majority of homeowners in the UK are still in a very healthy financial situation, with their homes retaining on average an equity value in excess of £160,000.

Senior Greenhill advisor David Reid said: 'For the most part homeowners have done very well from property, and many may now prefer to invest by making their homes nicer through remortgaging or taking our secured loans.'

Greenhill Finance can help select the best secured loan with money in the bank within 21 days. For more information call 0800 916 4148 or visit http://www.greenhillfinance.co.uk.

Useful links

Interest Rate Cuts 2008: http://www.walesonline.co.uk/business-in-wales/business-news/2008/08/18/cut-rates-sooner-business-warns-91466-21550721/

Interest Rate Dilemma: http://uk.biz.yahoo.com/07082008/140/uk-interest-rates-stick-twist.html

Inflation Fall in 2009: http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/17/cncpi117.xml

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