Commercial Mortgage Lenders

The Bank of England’s decision to freeze interest rates at 5% have been welcomed by lenders.

Commercial mortgage lender, InterBay applauded the monetary policy committee’s decision to steer clear of another rise.

Operations director Colin Bell said: “Although property prices are still rising, consumer spending is down on this time last year, so keeping rates on an even keel in the short-term means no additional pressure for commercial owners and small businesses in the retail sector.”

He said an increase in consumer spending in the high street running up to Christmas meant that a rise is likely for the New Year.

Bell added: “Commercial owners may also be hoping that the Chancellor’s revision of the economic growth trend announced in the pre-budget report (to 2.75%) may mean that there is less pressure on the monetary policy committee to up rates again in early 2007.”

Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester, said despite strong growth in the UK housing market the economy overseas had played a part in the Bank’s decision.

“The sharp fall in the US dollar and the unexpected downturn in manufacturing statistics have probably been responsible for no movement in rates this month," he said.
The Bank of England’s monetary policy committee raised the cost of borrowing to 5% earlier this month – the highest in five years – and the second rise in the last four months in a bid to keep inflation at bay.