The success and failure of the UK housing market lies firmly in the hands of the members of the Bank of England’s Monetary Policy Committee.  The nine member group is responsible for the basis of where all lenders start from when constructing interest rates attached to mortgage and remortgage deals.  This rate, which has been sitting exceptionally low at 0.5%, will continue at the same level as of the monthly January meeting.  The rate has remained the same for roughly three years now and no change is predicted for the near future.

Those seeking an original mortgage or remortgage have had a clear advantage for months.  But, with many factors working against them, the housing market continues to remain flat.  Those challenges are expected to continue their reign during much of 2012, as the market is expected to remain flat also.

Howard Archer, of HIS Global Insight, commented on the base rate at the end of January, saying: “There seems to be little appetite within the MPC for taking interest rates lower than 0.50%. It is notable that the minutes of the December meeting once again did not reveal any discussion within the committee over the possibility of trimming interest rates and it is also significant that even at the height of the 2008/9 recession, the Bank of England take interest rates below 0.50%. This reflected doubts within the MPC that even lower interest rates would have a net beneficial impact.

“It is very clear that interest rates will not rise for some considerable time to come – we do not expect any hike until at least the second half of 2013 and it currently looks eminently possible that the Bank of England could keep interest rates down at 0.50% through to 2014.”