Base rate cut to 5% in what ‘will prove to be a shot in the arm for the housing and mortgage markets’

The Bank of England has today cut the base rate by 0.25% to 5% in what one expert has said “will prove to be a shot in the arm for the housing and mortgage markets”.

Newspage asked experts for their views on what this means for borrowers, the property market, savers and investors.

Ranald Mitchell, director at Charwin Mortgages said, “Game on. After a long wait, the Bank of England delivers relief for millions by cutting the base rate by 0.25%.

“This means someone with a £250,000 mortgage over 25-years could save £440 a year. With this rate cut and fierce competition in the mortgage market, many will believe it’s the perfect time to reignite their property search and get moving.”

Andrew Montlake, managing director at Coreco said, “After much speculation, the Bank of England has finally heeded the calls of existing and prospective borrowers for a much-needed interest rate cut.

“Whilst the market had already priced such a move in, sentiment is everything and this will prove to be a shot in the arm for the housing and mortgage markets.

“Had it not moved, the Bank of England would have been accused of being over-cautious and out of touch with the mood on the High Street, but this move shows that they can listen. Although mortgage rates have already been steadily dropping in anticipation of such a move, this will give more lenders confidence to improve their offerings, although borrowers should not expect huge downward spirals.

“Further reductions will come but these will be very slow and steady as the Bank continues its cautious approach. Nevertheless, this is a day of celebration as a corner has most definitely been turned.”

Rohit Kohli, director at The Mortgage Shop said, “Today’s reduction in the Bank of England’s base rate brings welcome relief to millions of borrowers, much like the incoming respite from the current mini-heatwave.

“This cut marks a significant turning point for many households, offering a small but meaningful reduction in mortgage payments and providing hope for the thousands still transitioning from ultra-low fixed rates. For those borrowing £200,000 over 30 years, this could mean a saving of up to £360 a year.

“However, those looking to buy should act quickly since, as demand increases, we may see house prices rise, potentially leading to a return to a sellers’ market and making it harder to get on the property ladder.”

Emma Jones, managing director at Whenthebanksaysno.co.uk said, “The Bank of England has finally seen the light and delivered.

“This bodes well for the property market and could see activity levels really start to pick up in the latter stages of 2024. Borrowers have been under immense pressure for so long and this move will help alleviate that pressure slightly.”