Property sector responds to Bank of England’s move to lower interest rates. – TNT

The Bank of England has cut interest rates for the fourth time in just under a year.

Policymakers at the Bank have opted to reduce interest rates from 4.5% to 4.25% today.

A lower rate is designed to boost spending by making borrowing, including mortgages, cheaper.

Intriguingly, the Bank’s rate-setting committee was divided – five members voted to cut rates to 4.25%, two voted in favour of a larger 0.5% reduction and two voted for no change.

Property professions across the UK have shared their thoughts on the Bank’s decision.

Industry reactions:

Richard Donnell, Executive Director at Zoopla, commented: “Today’s base rate cut is welcome news for people looking to sell and buy homes in 2025. It will provide a boost to market sentiment and filter slowly into lower mortgage rates as the cost of fixed-rate mortgages already reflects future cuts in the base rate. This, alongside reforms to mortgage regulations announced recently, will help boost buying power. This is important at a time when there is a large number of homes for sale across the UK – the average agent has 34 homes for sale.  Improved buyer confidence will support sales and help more people realise their moving ambitions in the year ahead.”

Matt Thompson, head of sales at Chestertons, said: “With interest rates now at 4.25%, more rate cuts on the horizon and a number of lenders offering sub-4% mortgages, the property market will undoubtedly see an increase in buyer activity. Particularly motivated will be first-time buyers who were unable to secure a property ahead of the changes to Stamp Duty thresholds and will see the lower interest rates as a window of opportunity to resume their search. House hunters who are in no rush, might wait until the Bank of England announces another rate cut but as buyer demand strongly outweighs the number of available properties, this strategy could see some buyers missing out.”

Iain McKenzie, CEO of The Guild of Property Professionals, stated: “Excellent news from the Bank of England. This decision to cut the base rate is a welcome boost for homebuyers and the wider property market. We’ve already seen mortgage rates easing, with sub-4% deals re-emerging, and this will only fuel that positive momentum, making homeownership more attainable.

“Despite global uncertainties, mover activity remains resilient, and with strong housing supply and sales agreed up year-on-year, the market is adapting well. This rate cut will further underpin confidence, supporting the forecast of a 5% uplift in sales volumes this year, particularly as we see the time to sell quickening. It’s a clear green light for those considering a move.”

Simon Capp, Head of Residential Sales, British Land, remarked: “The Bank of England’s decision to cut the base rate to 4.25% is particularly welcome given recent buyer hesitation linked to the global economic outlook and stock market fluctuations. Improved mortgage affordability will undoubtedly motivate some buyers sitting on the fence to commit to purchasing in 2025. Today’s decision will hopefully help to stimulate the housing market and provide wider economic benefit for UK Plc as homebuyers purchase additional goods and services as part of the home moving process.”

Nathan Emerson, CEO of Propertymark, commented: “Today’s news will no doubt be extremely welcome for many, especially given current economic uncertainties. International bodies have recently stated they expect interest rates to fall in the UK as the year progresses. Overall, we hope to see interest rates further continue their downward trajectory over the course of 2025.

“The UK housing market has recently been buoyed by stamp duty threshold changes leading up to the start of April, and with the busier spring and summer months now here, this base rate reduction should attract even more buyers and sellers to the market and provide greater affordability.

“Housing is a central part of the UK economy, and we now hope to see considering the UK government and the devolved administrations have shown a keen focus on housing growth, is that they look ahead to achieving their individual housebuilding targets to meet growing demand.”

Emily Williams, director of research at Savills, noted: “Today’s anticipated rate cut by the Bank of England should give homebuyers confidence that mortgage affordability will continue to improve, despite the recent global trade uncertainties.

“Fragile buyer sentiment has caused housing market recovery to lose some traction in the last couple of months, despite a strong start to the year. The latest data from TwentyCi shows a -5.4% drop in net agreed sales year-on-year and a slight uptick in instructions ( 2.2%), which indicates a cooling in market activity now that the stamp duty deadline has passed, and within the context of sluggish economic growth.

“This uncertain backdrop continues to undermine buyer confidence, even with a competitive mortgage market and expectations of further base rate cuts.

“It looks like we are in for at least another two rate cuts this year, which should gradually widen the pool of buyers and increase their buying power. Additionally, we are seeing some lenders ease the affordability tests they put borrowers through, on the back of revised guidance from the Bank of England.

“This could support a more stable recovery in the medium term, though weak consumer sentiment is likely to keep market conditions subdued for now.”

Amy Reynolds, head of sales at Antony Roberts, said: “A rate cut helps the housing market hugely as it gives borrowers an affordability boost, filtering through to lower mortgage rates, which encourage activity.

“The Bank of England was widely expected to cut rates this month, and with borrowing costs remaining high compared to the pre-2022 norm, this is a welcome move.

“The stamp duty holiday has helped transaction levels with an increase in sales agreed in those chains where there is a first-time buyer keen to take advantage of the discount before the end of March. While this has been welcome, there have been concerns that once the stamp duty holiday ends, there will be a dip in activity and transactions, which is why the timing of this rate cut is so important.”

Jeremy Leaf, north London estate agent, said: “With so much media speculation over the past few weeks, and the need to boost economic growth because of the talk surrounding tariffs, any cut to base rate today has already been largely factored in by homebuyers.

“Nevertheless the reduction will serve as a welcome shot in the arm to activity which has been flagging lately since the stamp duty concession was removed at the end of March.”

Kevin Roberts, MD of L&G’s Mortgage Services business, commented: “Today’s decision to cut the base rate by 0.25% will be very welcome news for many homeowners and prospective homebuyers, and this will likely boost confidence in an already buoyant market. If you are looking to buy, or remortgage, now is a great time to consult with a mortgage broker to take advantage of this opportunity. We’ve already seen many lenders reduce their rates, and competition between providers will bring more tailored products to the market. We know the demand is there – our broker mortgage search data shows first-time buyer and remortgaging activity jumped 45% and 34% respectively since last year.”

Simon Gammon, managing partner, Knight Frank Finance, stated: “This 25bps cut will support sentiment in the property market by entrenching the view that mortgage rates are now moving in the right direction. The lenders have cut rates pretty aggressively during the past month and almost all the major institutions have fixed rates available below 4%. That’s quite a bit lower than looked likely only a few weeks ago.

“The fact that two MPC members voted for a bumper 50 basis point reduction could perhaps trigger a few more mortgage rate cuts during the weeks ahead. The lenders are engaged in a fierce battle for market share and are eager to make cuts the moment they are able to do so.”

Matt Smith, Rightmove’s mortgage commentator, added: “The much-anticipated second rate cut of the year has arrived, and with some lenders having taken their time to pass on the benefits of the expected Bank Rate cut, I think we may now see further reductions in the coming days and weeks. A fresh round of mortgage rate reductions could be a boost for buyer demand as this year’s Spring Selling season approaches its end.

“The lowest available five-year and two-year fixed mortgage rates are edging downwards, with the cheapest available two-year fixed rate the lowest it’s been since before the mini-Budget. Since the last rate cut, we’ve also seen how lenders are trying to help home-buyers outside of reducing rates, by reviewing their affordability criteria.

“Looking ahead, there’s still a lot of uncertainty over how trade tariffs may impact the global economy, so it’s difficult to make predictions right now. However, as it stands, the financial markets are forecasting two-to-three more Bank Rate in 2025, which could take us to a rate of 3.75% by the end of the year. In the short-term, I think movers can expect average mortgage rates to trickle downwards over the next few weeks but not dramatically.”