Good news for buyers and sellers as the Bank of England reduces interest rates for the first time since the pandemic.
In a move that could signal a boost for the housing market, the Bank of England has decided to cut interest rates for the first time since the start of the Covid pandemic. This is a big deal for anyone thinking of buying or selling a home.
For over a year, borrowing money has been expensive, with interest rates stuck at their highest point since the 2008 financial crisis. But now, the Bank of England has lowered its key interest rate – known as the base rate – by 0.25%, bringing it down to 5%.
This doesn’t mean things are back to normal just yet, though. The Bank of England is still worried about the cost of living going up too quickly (inflation) and wants to make sure it doesn’t shoot up again.
What does this mean for you?
Property Industry Eye spoke to several housing market experts. They are predicting:
- Mortgage rates could fall: Cheaper borrowing from the Bank of England should mean cheaper mortgages from lenders. This is great news if you’re looking to buy a home or remortgage your existing one.
- More buyers could enter the market: Lower mortgage rates mean more people can afford to buy, potentially leading to more competition and a busier housing market.
- House prices could rise: With more buyers and cheaper mortgages, house prices could start to increase, especially as we head into the usually busy autumn property season.
Experts React
- Anthony Codling from RBC Capital Markets believes this is the start of a new chapter for the housing market. He predicts a strong autumn as buyers and sellers take advantage of the more positive conditions.
- Ben Thompson from Mortgage Advice Bureau agrees that we might see further cuts to interest rates in the future, making it even cheaper to borrow money.
- Nathan Emerson from Propertymark, a group representing estate agents, says the cut is a “huge sigh of relief” for homeowners and aspiring buyers.
However, Simon Gammon from Knight Frank Finance points out that while this is good news, the real impact might be on people’s confidence in the market. He thinks many buyers and sellers who have been holding back will now feel more confident about making a move.