Base rate lowered by 0.5% - buy to let mortgages

06 February 2009

A base rate cut of 0.5 per cent has been unveiled by the Bank of England, something that could be beneficial for those with buy to let mortgages.

The decision was announced following this month's meeting of the monetary policy committee, taking the rate down to one per cent.

Weak spending and falling inflation were two reasons that the Bank cited for the measure.

It also noted that the global economy is in the "throes of a severe and synchronised downturn", while the supply of credit to individuals and businesses has remained restricted.

Council of Mortgage Lenders director general Michael Coogan expressed doubt that the reduction will boost the provision of new loans.

But he commented: "If the rate cut helps businesses and therefore helps to keep people employed, this will at least help to cushion the impact of the recession on the housing and mortgage markets.