Yes, it’s the first Thursday of the month again and the Bank of England’s Monetary Policy Committee (MPC) has held its usual monthly meeting to discuss the state of the economy. During the meeting it was decided by the committee that the current base rate of interest for loans and savings should remain at the same level of just 0.5 per cent for the next month.

This means that the base rate has now remained unchanged for eleven months. many individuals were beginning to worry about the cost of their variable rate home owner loan increasing, due to speculation about a possible interest rate increase, caused by higher inflation in December last year, but it now looks as though the cost of a variable rate loan will not go up until the Spring at the earliest, although a number of lenders are currently increasing their own standard variable rate for loans they offer.

Despite the UK officially leaving recession this quarter, the Bank decided to keep the rate at 0.5 per cent due to the “sluggish growth” which has been seen over the course of the past three months.

A spokesperson for the Bank of England said “Spending by households appears to have picked up a little, though this may reflect temporary factors. The rate of decline in business’ investment spending appears to have eased. And the world economy continued to recover, raising the demand for UK exports.”

“But credit conditions are likely to remain restrictive, while the need to strengthen public and private sector finances will also weigh on spending. On balance, the committee believes that the prospect is for a gradual recovery in the level of activity.”

It was also decided to maintain the level of Quantitative easing at its current level of £200 billion.

After one of the worst years in memory for the home owner loan and mortgage market, we are slowly starting to see some signs of recovery as banks and building societies begin to launch some more competitive loan products, at more affordable rates and higher loan to value ratios.

However, this is not the case across the whole of the market and landlords in particular are finding it increasingly difficult to obtain the buy to let loans they require in order to expand their portfolios, with around half of them struggling to find suitable funding through loans, according to a new survey from LSL Property Services.

According to the survey, 49 per cent of landlords believe that now is a good time to invest in additional property, before prices start to increase and although most would like to buy more houses, only 27 per cent think that they will be able to afford to make any purchases at all, due to a lack of availability of buy to let loans. Only 12 per cent of those surveyed thought that getting the necessary loan funding they required would not be a problem for them.

David Brown at LSL Property Services said “2009 saw the buy to let market return as a viable investment. Landlords recognise this, despite the rough ride they had to endure over the last couple of years. The average landlord made losses in 2007-8, but 2009 marked a return to form for property investment. But the availability, or lack of, of mortgage finance is holding the sector back. Even experienced landlords who are keen to take advantage of lucrative returns and improving market conditions can’t get access to the cash they need.”

The recent proposals for changes to the regulation governing the home owner loan and mortgage industry made by the Financial Services Authority (FSA), have had a mixed response from those individuals working in the industry. However, one group has called on the FSA to go further and place a ban on telephone advice for those people seeking help with an equity release loan, or lifetime mortgage. In their response to the FSA’s proposals, the Society of Equity Release Advisers (SERA) commented yesterday (Monday 1st Feb) that there should be a complete ban on telephone advice on equity release loans.

Simon Chalk, of SERA, commented that giving advice on equity release loans over the phone could place some individuals under additional pressure and duress and the practice should therefore be banned. Not surprisingly, this proposal has been widely condemned by those working in the equity release loan sector, who believe customers should be able to get advice on such loans in any way they like, whether that is via the internet, by face to face interview, or over the phone.

Under the SHIP (Safe Home Income Plans) rules, anyone taking out this type of loan must take independent legal advice before they sign up for the deal.

One adviser, who runs an independent firm offering advice on equity release loans over the phone, says he has seen an increase in activity in this type of loan, at a time when equity release loans are generally falling in numbers. He also said that he was surprised and disappointed by SERA’s suggestion and that people should be able to receive advice however they wanted, including over the phone, provided that this was conducted in a compliant manner and all phone calls regarding loans were recorded.

There have been an increasing number of methods for individuals to find the loan they need, whether it be an unsecured loan for car purchase, perhaps, or a secured loan for debt consolidation, or a home owner loan or mortgage.

Potential borrowers have the choice of either going directly to the lender for their loan, or via the internet through one of the many price comparison websites, or by using the services of a loan broker of financial adviser, who is usually able to offer face to face and specific advice to potential borrowers and also source the best deal on the market for the individual’s particular needs.

Over the course of the past couple of years, since the start of the credit crunch and banking crisis, many banks and building societies have been shutting out financial intermediaries and loan brokers, by only offering their best loan deals directly to customers. But as lenders are starting to ease their lending criteria and offer more competitive products, it seems than some of the best deals on the market are now only available through financial advisers and loan brokers.

New research from Moneyfacts.co.uk has revealed that the average 2 year fixed rate home owner loan, form a high street bank of building society is 4.86 per cent, compared with just 4.79 per cent by using a broker. Similarly a five year fixed loan average cost is 6.05 per cent in branch, compared with 5.97 per cent through a broker.

Darren Cook at Moneyfacts.co.uk said “Like many others, mortgage brokers have probable felt one of the biggest impacts of the banking crisis and they have also had to deal with the frustration of dual pricing. At the height of the crisis, many mortgage providers preferred to offer the better deals to their direct customers, which enabled them to turn off the taps to new lending very quickly. Brokers have and  always will form an integral part of a healthy mortgage market, so we hope that dual pricing fades away soon and we return to a level playing field as quickly as possible.”