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Exciting news this afternoon in the world of property as the Bank of England once again slashes the base rate down to 4.25% this afternoon, which is a further 0.25% cut. In a week where we have witnessed various lenders offering up more products, this is great news for the property industry.
This cut will be the 4th reduction over a 12 month period and the 2nd reduction this year, in 2025. The decision to slash the rate was not unanimous with two parties arguing that the rate should remain the same for now. Two further parties argued that the rate should be cut to 4% right now. This will make for interesting discussions at the next meeting.
Many mortgage holders will be relieved that this will mean a reduction in their monthly payments. And with just short of 600,000 people on mortgage ‘trackers’ the reduction will have an immediate impact for those home owners.Around 1.6 million mortgages are due to expire (coming out of their current deal) during 2025, this means that there might be more deals around than you first thought there might be.
Lots of lenders have recently been slashing their new fixed rate deals, so let’s hope even more products appear over the next few weeks. The Nationwide was offering a new sub-4% deal this week which is the first time since September 2024, and there are other big lenders such as Virgin Money and Halifax who were offering decent deals.
Source: Bank of England (Datawrapper)
Homeowners can expect to make just under £30 per month in savings with the new rate. And with a prediction of further drops later this year and into 2026, when it is expected to reach rates as low as around 3.5% this news is welcomed by all property owners. Natwest are already offering a 5-year fixed rate at 3.88% for purchases.
This should alleviate some of the pressure for first time buyers and make home ownership more of a possibility again for many.
Could this be the boost that the UK economy needs right now? Will this encourage more investors? What do you think?
Trump’s recent tariffs have clearly had an impact on the UK economy, and it could be speculated that the Bank of England has lowered interest rates to stimulate growth in the property market. Businesses also tend to invest more money in projects and staff when interest rates are lower, as the cost of taking on debt is lower, so this is overall good news for the general economy.
There are always potential benefits for new buyers entering the market during a period when there are lowered mortgage rates and when fixed-rate mortgages are more accessible at lower prices. Could this decrease be a sign that you should jump back on the property investment ladder? Renewed buyer enthusiasm should lead to faster house sales and potentially higher offers.
If you are looking for an asset-backed property investment, why not get in touch with our team and find out more.
www.murraypropertyholdings.co.uk
info@murraypropertyholdings.co.uk
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NB: This article is not financial advice – please seek independent financial advice when looking to purchase property.
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