Base rate held at 0.5%

10 July 2009



The interest rate is to be held at 0.5 per cent for the fourth consecutive month, the Bank of England Monetary Policy Committee has decided. This, however, may not help landlords who are struggling with the effects of rising unemployment and other financial strains among their tenants, one website has warned.

According to smartlandlord.co.uk, interest rates need to be held indefinitely in order to lessen the strain. Lowering them further will not help the housing market at this stage, it said, despite some optimism being seen within housing transaction figures in recent weeks.

The Bank has also opted to continue with its programme of asset purchases, which are to be financed by the issuance of central bank reserves and will total £125 billion. "Rather than concentrate on interest rates, the bank should put the pedal to the metal with quantitative easing: it needs to raise the scale of its purchases of government and corporate debt to inject fresh money into the economy," commented Managing Director of smartlandlord.co.uk Keshav Thukaram.

Chris Hardy partner in the Commercial property practice group, comments: "The fall in interest rates has helped some landlords, but as the interest rate is tax deductible, it is not as important as a good tenant and a healthy demand for rented property.

"Landlords are much more dependent upon their tenants than on the level of interest rates, and if tenants are struggling due to unemployment and falling salaries then so will landlords. Landlords need to be aware of any problems their tenant is having and work with them to assess whether a difficulty can be resolved with a temporary concession or a more permanent solution is required."

If you require legal advice, for either your private affairs or organisation, please call Buckinghamshire based B P Collins Solicitors on 01753 889995, complete the online enquiry form or email enquiries@bpcollins.co.uk.

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