- 07979198280
- info@murraypropertyholdings.co.uk
The Bank of England (BoE) has cut the base rate again – and it has now been reduced to 4% – but what does this mean for Scotland’s Property Market?
On August 7th the BoE reduced the base rate from 4.25% down to 4%, making this the FIFTH consecutive cut since August 2024. This time it was decided by a 5-4 vote, which reflects the bank’s attempt to slow down the economy, despite inflation currently sitting at 3.6%.
Lenders have already responded to the recent cut, with Nationwide’s Standard Mortgage Rate (SMR) being cut by 0.25% to 6.74% (taking effect on 1st September).
Virgin Money and Clydesdale Bank SVR’s have dropped from 7.24% to 6.99% and buy to let rates (BTL) are dropping from 7.74% to 7.49% (effective 21st August).
These significant reductions will lower monthly payments for many, especially those about to remortgage their properties or entering the property market for the first time.
Tracker mortgage holders might save around £25-30 per month or up to £350 annually. Standard variable rate customers will witness a reduction of around £13-£14 per month, or £165-£167 annually – that’s if lenders pass on the savings.
Fixed rate mortgage holders won’t see any immediate changes but with a whopping 900,000 fixed deals due to end in 2025 – many customers will benefit from this greatly.
Again, a rate cut is always good for first time buyers, stress tests for affordability always drop a little and there are many deals under 4% for strong applicants. This means that first time buyers might find it slightly easier to qualify for mortgage repayments. House prices have, however, continued to grow steadily.
Yes, quite frankly we did! It is a very positive signal to have yet another base rate cut for both buyers and sellers of property, it is not a massive change, but enough to stimulate some interest in the market that was becoming a little stagnant.
Investor activity has been picking up over the last month or so. The lower borrowing costs now available are helping to improve net yield figures.
If for example we take a look at a landlord refinancing a £300,000 property if the interest rate drops from 6% down to 4%, this could potentially save the investor around £300 a month – quite a significant saving!
Scotland has the added advantage that a lot of overseas investors are returning to the market (as the £GBP has been weaker lately) which we think will create some momentum for sales.
In general, inventors might view this next quarter as a renewed opportunity to expand their portfolios again!
If you would love to chat with us about the current market, or any issues relating to property investment, please don’t hesitate to get in touch for a quick chat!
www.murraypropertyholdings.co.uk
info@murraypropertyholdings.co.uk
#propertyinvestment #propertyinvestors #scottishpropertymarket #bankofengland #BoE #baserate #baseratecut #buyproperty #investinproperty
Sign up here to our informative LinkedIn Newsletters (below – hit gold with the gold button!)
We bring you all the latest in general property news, rates, eGuides, calculators and much more, you won’t be disappointed.
Email: info@murraypropertyholdings.co.uk
Call: 07979198280