Released on: April 28, 2008, 5:41 am

Press Release Author: Jim watson

Industry: Real Estate

Press Release Summary: Yesterday may not have brought the most startling news in
economic history when the Bank of England\'s monetary policy committee (MPC)
announced it was cutting the base rate by 0.25 per cent for the third time in five
months.

Press Release Body: Yesterday may not have brought the most startling news in
economic history when the Bank of England\'s monetary policy committee (MPC)
announced it was cutting the base rate by 0.25 per cent for the third time in five
months.

Revealing the news, the body said it had made its decision after assessing the
comparative risks of inflation pushing upwards beyond the near-term surge the MPC
had already accepted is happening and the alternative risk that low growth will see
it undershooting the target.

It concluded: \"In the committee\'s judgement, the balance of these risks to the
inflation outlook in the medium term justifies a cut in Bank rate this month.\"

How clear this decision was will not become apparent until the minutes are released
on April 23rd. But an immediate issue which may become clearer before then is the
issue of whether the property market will be boosted by the banks passing on the
rates to mortgage customers, other than where the customers are on tracker deals and
thus automatically gaining the benefit.

Pre-empting the issue, the National Association of Estate Agents urged the banks not
to hold back from passing on the reductions, as some feared. Chief Executive Peter
Bolton King said: \"Moving forward, it is now more critical than ever that mortgage
lenders adopt a similar approach and lower mortgage rates in line with today\'s
drop.\"

Yet the suspicion has persisted that many lenders, some of whom have form for such
practices, would not pass on the cut. This morning the Daily Telegraph quoted Ann
Robinson, director of consumer policy at finance website uSwitch.com, suggesting
many were \"refusing to pass on interest rate cuts\".

While it is true that this has been the case in the past, the evidence so far is at
least that some of them are cutting standard variable rates. While First Direct\'s
announcement that it had cut a rate that was \"one the lowest from any major bank or
building society\" may mask the fact that it was in fact a 0.2 per cent cut rather
than 0.25 per cent (from 6.2 per cent to six per cent), others have gone the whole
way, offering a cut to existing lenders from early May and for new
borrowers from dates in April. Lenders to announce this so far include Alliance
Leicester, NatWest, the Royal Bank of Scotland and the Co-operative Bank.

However, while the news so far may at least partially allay one concern, the impact
of one rate cut may not be enough to reignite the whole market, the director general
of the Council of Mortgage Lenders Michael Coogan suggested.

Mr Coogan stated: \"In these dysfunctional market conditions, the base rate is not in
itself a good guide to the cost or availability of funds to lenders.\" His suggested
solution was a further cut next month along with the Bank of England injecting more
liquidity into the market.

Therefore it may be that the move made by the Bank of England yesterday was another
step towards the market recovering and offering some new prospects for investors,
but more steps may be needed to ensure this is the case.

In today\'s world Property investment is an excellent investment option especially
investment in UK


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