The Bank of England has held its base rate at 0.5% for the 12th consecutive month and announced that there will be no changes made to the Quantitative Easing (QE) programme as concerns have arisen about the persistence of above-target inflation in the medium term.

James Thomas, head of residential development and investment at Jones Lang LaSalle, told PIN: “The base rate will stay as it is until the end of the year, as uncertainty in the UK and global economy will continue and as the looming general election also causes uncertainty in the short term, whilst its effects will not be seen until after the election, before it gradually rises in 2011 as the results of the quantitative easing will create a dose of inflation.

“Banks have been cautious as they try to reduce their loan books. In the last 12-18 months, lenders have increased their rates due to the risk in the market, but recently have become more accommodating as they look to attract more borrowers particularly those seeking to purchase new build flats as opposed to second hand properties.”