Property Market Boost as Bank Cuts Interest Rates

Members of the Bank of England’s Monetary Policy Committee (MPC) have voted narrowly to cut interest rates, with a decision split of five votes to four. This eagerly anticipated move is expected to provide a significant boost to the UK property market just as the summer holidays begin.

In Anticipation of today’s decision major lenders, including Halifax, NatWest, and Santander, had already reduced their mortgage rates. This proactive approach from lenders is set to ease the financial burden on homeowners with fixed-rate mortgages nearing their end, offering them a more favourable position as they prepare to renegotiate their loans.
Inflation held steady at 2% in both May and June, aligning with the previous Government's target. This stability likely played a role in the Bank's decision to lower rates. The last MPC meeting in June opted to maintain the base rate at 5.25%, with the next announcement scheduled for 19 September.

Newly appointed Chancellor Rachel Reeves, who assumed office following Labour’s victory in the recent General Election, expressed her support for the rate cut. While emphasising the Bank's independence, she acknowledged the potential benefits of such a decision.

Malcolm Prescott, Managing Director of Webbers Property Service, commented, “We have anticipated a rate cut during the summer months, so we are not surprised but very pleased with the decision. The UK property market thrives on confidence, and this is the added ingredient that buyers and sellers have been waiting for. At Webbers, we have seen a 35% increase in properties for sale stock year-on-year, offering tremendous choice. We must therefore expect viewing activity to rise, especially with more competitive mortgage products likely to follow.”