Property industry reacts to Bank of England base rate cut

Following a hold in March, the rate has today been cut to 4.25%.

This comes as a result of inflation remaining relatively stable and decreasing to 2.6% (March 2025), despite being higher than the Bank of England target rate of 2.0%.

The decision to cut the base rate by the Monetary Policy Committee was the result of seven out of nine members voting in favour of reducing the rate.

Bradley Post, MD of RIFT, said, “A second consecutive cut to the base rate already this year will come as welcome news if you’re a borrower, particularly for those households who are continuing to feel the pinch where the cost of living is concerned.

Of course, whilst it may mean that we’re paying less when it comes to our mortgages, or other finance agreements, it does mean that the interest accrued on our savings pots will weaken and this won’t be as warmly welcomed by those trying to form a nest egg.”

Stephanie Daley, Director of Partnerships at mortgage advisor Alexander Hall, said, “We’ve seen a consistently strong level of mortgage activity develop since interest rates stabilised and a second cut so far this year will only boost confidence in the market even further.

The good news for homebuyers and remortgagers is that lenders have already been reacting positively to this greater degree of mortgage market stability and over the last month we’ve seen rate drops across all loan to values on both residential fixed rates and BTL rates.

Not only have we seen sub 4% rate products become available again, but the number of low deposit mortgage products available are their highest in 17 years, which should help first-time buyers to climb the ladder sooner than expected.”

Chief Sales Officer for Foxtons, Jean Jameson, said, “Whilst a cut was widely expected today it will still fuel the property market momentum that has been building over much of the last year and, with interest rates now trending downwards, we can expect to see homebuyers acting with an even greater level of confidence over the coming months.

Those coming to the end of a fixed term are also set to benefit and we’ve seen rates already start to fall in the lead up to today’s decision, with many lenders reintroducing sub four percent mortgage products, driven by increased mortgage provider competition.

With a greater degree of mortgage affordability fueling the market, it’s looking to be a very positive year and the expectation is that house prices will continue to hold firm on their current upward trajectory.”

Thomas Cantor, Co-Head of Short-Term Finance at West One Loans, added, “Whilst inflation has continued to ease since the start of the year, it still remains slightly above the Bank of England’s two percent target and so today’s decision to cut the base rate was widely expected and arguably the correct one to make, particularly given the fact that economic headwinds continue to blow, most notably from across the Atlantic.

Although the economic growth forecast for the year ahead may have been marginally downgraded, there’s plenty to be positive about, especially within the lending space. We’ve seen swap rates drop, which suggests that we’re already in for a far more positive second half of the year, and whilst the current landscape is not without its turbulence, we expect to see further positive sentiment emerge over the course of the year.”