Quantitative easing 'will help the mortgage market'

Date:Friday 6th March 2009
Author: Rachel Fletcher

The Association of Mortgage Intermediaries (AMI) has given its support to the Bank of England's quantitative easing strategy.

Yesterday, as well as announcing the new lower base rate of 0.5 per cent, the Bank also said it would be putting £75 billion more into circulation.

The AMI's director, Robert Sinclair, said that his organisation has long stated that the mortgage market needs a greater amount of liquidity.

He said that the injection of money into the system would help to address this issue, though he also called for "bad loans" to be taken away and for the Crosby report's measures to be implemented swiftly.

Meanwhile, mortgage expert firm John Charcol noted that tracker mortgage holders would be enjoying lower rates and singled out some standard variable rates, such as those with Cheltenham & Gloucester and Nationwide, which would benefit their borrowers.

However, the organisation also noted that interest rates will inevitably rise again and suggested that people overpay their mortgages if possible and look into the possibility of long-term fixed-rate deals.

Spokesperson Ray Boulger realised that the higher rates would not seem attractive but could have long-term benefits and urged people to seek professional advice.