The Bank of England’s Monetary Policy Committee has told the UK’s banks to prepare for negative interest rates within the next six months.
While the Bank stressed this doesn’t mean negative rates are necessarily going to be put in place, policymakers want to be ready to bring interest rates below zero if necessary. The request was made at the same time the Bank of England opted to hold interest rates at a record low of 0.1%.
Sarah Coles, personal finance analyst, Hargreaves Lansdown, said: “The Bank of England has asked banks to get ready for negative interest rates, which will have struck fear into the hearts of millions of cautious savers. They’re already suffering truly dire returns from high street banks, so the thought of having to pay a bank to hold their savings is unbearable. Fortunately, it’s also unlikely.
“The Bank was at pains to stress in the meeting that negative rates might never happen. The more that inflation rises closer to the 2% target, the less likely negative rates become, and the Bank is expecting inflation to kick in during the first half of 2021.”
Over half (54%) of commercial brokers have warned that transactions won’t have completed by the stamp duty holiday deadline of March 31st, Shawbrook Bank’s Broker Barometer has revealed.
Due to the slow way the property market is operating there are fears a number of people could miss out on the stamp duty saving of up to £15,000 and three quarters (75%) of brokers think the stamp duty holiday should be extended past March 2021.
Emma Cox, sales director of property finance at Shawbrook Bank, said: “The announcement of the stamp duty holiday in the summer last year has no doubt had a hand in helping to release pent up demand and get the housing market moving again.
“As investors seek to make the most of the holiday ahead of the deadline, it is understandable that brokers are reporting these positive outcomes as a result. We are aware that there are still brokers who will be facing challenges, and that the next few months are likely to be busy for many.
“Our teams are prepared to deal with an increase in activity, but we recommend applications that seek to take advantage of the holiday are submitted as soon as possible. It is a very busy time for the property market, which is why it remains crucial for lenders to continue to work closely with brokers over the coming months.”
Most brokers think the stamp duty holiday has resulted in increased investment in the property market (63%) and resilient property prices (33%).
Reduced investment in the market (41%) and falling property prices (34%) are expected once the relief expires.
[Source: propertywire.com/news, 5 February 2021]
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