Commentators believe banks are unlikely to pass on benefits to borrowers

The Bank of England has held interest rates at 0.5%.

James Thomas, head of residential development and investment at Jones Lang LaSalle, said the move was no surprise. He said: “The number of unemployed in the UK hit the 2 million mark during the three months to January. This will hamper the recovery of the housing market, particularly where people are unable to re-mortgage if they have lost their jobs. The fall in the value of their property means that the loan-to-value test may not allow them to transfer elsewhere when low-rate trackers come to an end.”

Commentators believe the banks are still unlikely to pass on the benefit to borrowers because the main issue facing the financial system is the availability, not the cost, of credit.