The Bank of England has cut interest rates at the first Monetary Policy Committee meeting of 2025, a move that could have notable results for the property market and borrowers across England. Home Property Law’s Tom Jones looks at the anticipated decision and what it means for the market.
This was widely anticipated prior to the decision, prompting a number of lenders to reduce mortgage rates. Barclays have reduced rates by up to 0.25%, with Halifax making cuts of up to 0.3%. Other lenders are following suit, and this activity could see borrowers benefiting on the full range of finance deals.
Whilst reduced rates generally make borrowing more feasible, encouraging all manner of purchasers, from first-time buyers, to investors, the scale of this impact on the market as a whole will depend on broader economic conditions, such as inflation and employment levels.
If demand for housing increases, prices may rise, and whilst decreased rates can ease pressures, affordability remains a concern. High property prices relative to wages/salaries still pose challenges for many prospective buyers, as well as the ongoing cost-of-living crisis. And whilst lower interest rates will reduce borrowing costs, securing a mortgage could still prove difficult due to factors such as credit history, available savings for a deposit, and lender criteria.
However, it is noted the housing market is off to its strongest start in 3 years with sales up by 12% and properties being listed for sale up by 10% when compared with the same period last year. It will be interesting to see if this trend continues beyond the proposed stamp duty amendments due on 1st April.
For those looking to remortgage, it may be advantageous to take up one of the currently available offers, as competition among lender may lead to more favourable deals. New buyers should assess their financial situation with great scrutiny and consider whether now is the best time to enter the market to secure and secure their first property prior to the new stamp duty rates taking affect.
If you’re looking at making a move, or purchasing your first property, get in touch with our amazing team at Home Property Law.
