August 19, 2016
Property gossip August 2016

Interest rates reduced but what else happened?

As we all know by now, the Bank of England has reduced the base rate to 0.25%, with all nine members of the Monetary Policy Committee voting in favour of the cut.

According to data from the Office for National Statistics, those with a variable 25-year repayment mortgage could save around £22 per month and those with a tracker product should see their monthly payments reduce by approximately £24.16 on a mortgage of £200,000 over an average 25-year repayment mortgage (or £41.66 if interest only). On the flip side, savers will be less impressed with the news and it should be noted that some mortgage products may include a “collar” in the small print, stating a minimum level at which their rate will drop to.

The BoE are also to buy £60bn of UK government bonds and £10bn of corporate bonds. They plan to introduce a new scheme encouraging banks to keep lending, by allowing banks themselves to borrow at somewhere near to 0.25%. Could this be good news for the UK Construction industry, spurring developers on to build more?

Having started the day at 16,997.13, come 11:40am the FTSE 250 index was sitting at 17,038.41, rising to 17,161.42 within 10 minutes of the Bank of England announcing their range of measures to stimulate the UK economy. The FTSE 250 closed the day at 17,244.32 (having risen significantly since then)

Landlord prosecuted for fire safety offences

A landlord has been fined £4,000 and ordered to pay £1,500 in costs after pleading guilty to three charges under the Housing Act 2004 at Hammersmith Magistrates’ Court. The landlord failed to provide proper fire protection for his tenants. The fire was started by a candle. Luckily nobody was hurt.

Cllr Rock Feilding-Mellen, Deputy Leader of the Royal Borough of Kensington and Chelsea and Cabinet Member for Housing, said:

“Landlords simply must be aware of all their responsibilities to their tenants and particularly where measures to protect tenants from the risk of fire are concerned.

“House in Multiple Occupation landlords must ensure that a competent person has carried out a fire risk assessment of their properties.

“I think it is fortunate no one was injured as a result of this fire which exposed the short comings in fire protection at 23 Balfour House. If we discover that laws designed to protect tenants are being flouted we will investigate and prosecute.”

Source – London Property Licensing

Homeownership numbers lowest for 30 years

According to new data from think tank, The Resolution Foundation, homeownership in England is at its lowest for 30 years. As at February this year, homeownership was at 63.8% – In 2003 homeownership peaked at 70.8%.

It is felt soaring house prices in times of weaker wage growth and lower supply of new housing is driving this situation so the message is clear – “build more affordable housing”