Released on: October 29, 2008, 10:39 am

Press Release Author: Michael Oakes / Young Group

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Press Release Summary: November's meeting of the Bank of England's Monetary Policy
Committee (MPC) is widely expected to result in a second consecutive base rate cut
of 0.5% but may not bring relief for homeowners.

Press Release Body: November's meeting of the Bank of England's Monetary Policy
Committee (MPC) is widely expected to result in a second consecutive base rate cut
of 0.5% but may not bring relief for homeowners.

Neil Young, CEO of property portfolio managers, Young Group, explains that whilst
this would be good news for the 30% of home owners that currently have tracker
mortgages, a reduction in base rate alone will not be the cure-all that many expect.

"A cut in base rate alone is not a magic bullet. The credit markets rely heavily on
the bank's confidence, reflected in the rate of interbank lending. The 3 month
LIBOR rate has not fallen significantly since the Bank of England's surprise half a
per cent cut in base rate at the beginning of October and remains around 6 per cent.
Unless LIBOR falls further, the cost of finance to banks and mortgage lenders
remains significantly higher than base rate and lenders will not reflect the base
rate change in their products because their cost of borrowing hasn't dropped - and
consumers taking out new mortgages won't benefit.

"I wouldn't be surprised if lenders begin to offer mortgage products that track
LIBOR rather than base rate in the near future."

Since the 0.5% base rate cut on 8 October, many lenders have discontinued their
tracker products on the assumption that further base rate cuts are in the offing and
are now only offering fixed rate products.

Indeed a number of lenders have withdrawn tracker products, only to relaunch them
with higher interest rates. Abbey, now one of the UK's largest mortgage lenders
following their take over of the Alliance & Leicester, raised the interest rate on
their 2 year tracker products by 0.5% immediately after the last base rate cut
announcement.

Neil Young also points out that those considering new tracker products should be
careful; "A number of well-known high street lenders have imposed collars on their
tracker deals, limiting the amount by which the mortgage holder can benefit in the
event of substantial base rate reductions. We're looking very closely at the small
print of products currently on offer and urge everyone to do the same and understand
fully the products that they are signing up to."

Repossession rates have increased according to the Council of Mortgage Lenders' most
recent figures, but the situation is by no means dire. Repossession is currently at
a level of 0.16% of all outstanding mortgages, still less than a quarter of the rate
reached in the early 1990s. Furthermore, the rate of repossession is no higher for
buy-to-let mortgages than for residential mortgages; 1,764 buy-to-let properties
were taken into possession during the first half of 2008.

Nevertheless, the government and lenders themselves must do more to support the
housing market to instil confidence in the sector and ease the current difficulties
experienced by some borrowers, but this is by no means a quick fix.

Neil Young points out; "The government last week put in place rules to enable
homeowners in difficulty to switch from repayment to interest only mortgages, but
these are not being adopted by the lenders, or indeed enforced by the Treasury, as
reports suggest that Lloyds TSB is blocking homeowners from switching to interest
only products."

Long term, prospects remain good with consensus forecasts indicating that the
property market will see strong recovery over the medium to long term, particularly
in the South East of England and London where the disparity between property supply
and demand is expected to drive a relatively rapid recovery of prices, once
confidence returns.

"We will find out on 6 November - or indeed sooner if last month's surprise
announcement has set a precedent - if the MPC believes that the UK economy will
benefit in the medium term from a further cut in base rate, but whether the majority
of homeowners see any benefit remains to be seen," explains Neil Young.

"The nation's focus on base rate is becoming less and less relevant as banks protect
their positions. It's increasingly clear that a cut in base rate is by no means a
quick, easy fix to the current credit market conditions; we need lenders and the
Government to work together to inject confidence as well."

-ends-

Neil Young, CEO - Young Group, is available for interview

About Young Group
Young Group specialises in providing Property Portfolio Management services to
private investors, offering the best off-plan direct investment opportunities and
end-to-end management service in London.

Young Group manages the entire investment process from sourcing the opportunities
through to financing, furnishing and letting. Young Group owns all the property
that it sells, and also retains a number of units in each development for its own
portfolio. As the principal in every transaction, Young Group does not realise any
profits until completion and has transacted in excess of 1,700 apartments, with a
retail value of more than GBP700 million.

The majority of our units are bought by private high net worth clients for their own
portfolios. The Group's portfolio managers liaise with the Young London
(www.younglondon.co.uk) estate agency team in advance of completion to let
investors' apartments to quality tenants, often through corporate lets.

Young Group clients have access to all available finance products via Young Group's
FSA regulated mortgage desk, Young Finance (www.youngfinance.co.uk). Young Finance
is an appointed representative of Thinc Assured Network, one of the UK's largest
financial advisory firms and is not tied to any group of lenders, nor does it charge
commission or transaction fees.

# Young Group's iconic Canary Wharf development, The Landmark
(www.TheLandmarkE14.com), has been awarded two Daily Mail Property Awards in the
categories of best high rise development and best high rise architecture. The
Landmark East Tower rises to a height of 459 ft, making it one of the tallest
residential properties in Europe.

# Young Group's COO, Sylvana Young, has been named Bradford and Bingley's Property
Woman of the Year, 2008 for London.

Young Group supports NORWOOD and CHILDREN with LEUKAEMIA, two charities particularly
close to our heart, donating GBP50 per property exchange and providing additional
support throughout the year. Visit www.younggroup.co.uk to learn more.


Web Site: http://www.younggroup.co.uk

Contact Details: Young Group
First Floor
71 New Bond Street
London
W1S 1DE

T:0856 356 1000
E:moakes@younggroup.co.uk
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