Those keen on buying New York property may find the cost of borrowing makes it easier after the decision of the US Federal Reserve to cut its main interest rate.

Yesterday it was announced that the federal funds rate will be reduced from one per cent to a range set between zero and 0.25 per cent.

The federal open market committee said it was taking this action as inflationary pressures were low, while consumer spending and production were declining.

Such a reduction may make mortgages cheaper for those keen to buy New York property.

The committee suggested such a low rate could be in place for an extended period of time, commenting that "weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time".

With rates low, the property market in New York and elsewhere in the US could see a recovery.

Last week the Royal Institution of Chartered Surveyors noted that mortgage applications in the country have risen since the US Treasury announced a plan to buy up mortgage-backed securities in return for lenders lowering their mortgage rates.

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