For property investors, this news of interest rate cuts should be viewed as positive – signalling a potential upcoming rise in property prices and market activity.
Property prices in the UK are already on an upward trajectory, with Halifax reporting a 0.3% monthly rise and a 3.2% annual increase for average house prices in April. This marked the highest increase seen so far this year.
Since lower interest rates reduce the cost of mortgages, we should see a gradual boost in market activity and demand for properties as more buyers are able to borrow and purchase property. This boost should ultimately encourage further growth for UK property prices.
News of lower interest rates is also positive for investors unable to fund their purchase with cash alone, as we could see more lenders offering reduced rates for buy to let mortgages.
With more lenders reportedly offering lower-priced mortgages for eco-friendly properties, investors could potentially find some great deals in 2025 with the right buy to let purchase.
Experts across the property industry have shared their thoughts. 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.”
Emily Williams, director of research at Savills, suggested that further interest rate cuts are on the horizon in 2025:
“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.”
