Top housebuilder commends mortgage rate drop

Last week's dramatic 1.5% interest rate cut by the Bank of England has been heralded as a great opportunity for housebuilders and people wanting to move or get on the property ladder, by Housebuilder of the Year Miller Homes.

The size of the drop to just 3% is the most extreme since 1981 and quickly follows an emergency cut in rates last month from 5% to 4.5%. The UK's largest lenders have now vowed to pass on the savings to mortgage holders and Miller Homes, which has developments in the Southern Region, is confident that this drop will have a huge impact on the property market.

Sue Warwick, national sales and marketing director, commented: "Although banks have taken their time to decide whether to pass on this reduction to mortgage holders, the size of the interest rate drop and pressure from the Government has seen the big players agree to share the benefit with the market place and it's likely that most others will follow suit, which is excellent news for anyone wanting to move or buy their first home.

"The drop will ease the fears of high monthly repayments on a new mortgage and give househunters a much needed boost. This new opportunity is combined with a whole host of once in a lifetime deals being offered by housebuilders. Miller Homes' MiWay scheme for example, which gives buyers the chance to pay 75% now and 25% later whilst allowing the customer to own 100% of the property, will mean the buyer benefits from both a much smaller mortgage and much lower interest rates at the same time.

"The demand for housing remains high despite the recent decline in sales. The Government has calculated that if we are to meet the demand for homes in the UK, the industry needs to be building 260,000 new homes a year [source: Barker Report]. This year, we will have fallen significantly short of that number. So inevitably, we are going to see a simple case of demand outstripping supply which will serve to underpin the housing market long term.

"At the moment, we are offering some truly incredible deals to tempt buyers but we all know that this can't and won't go on indefinitely. Buyers should take advantage of the market now because once the shortage of new homes starts to hit, prices will inevitably begin to climb again.

"My advice to anyone thinking of moving now - or in the near future, is to go and speak to developers. This is an incredible opportunity, not to be missed."

The huge interest rate reduction, if passed on, will lower monthly repayments for those with tracker deals by approximately £134 on an average £150,000 mortgage (source: Uswitch.com).