With markets widely anticipating a cut from the Bank of England today, the key question was whether it would be 25 or 50 basis points. The confirmation that the Monetary Policy Committee has lowered the base rate from 4.5% to 4.25% is already being welcomed across the mortgage and property sectors.
Experts from across the industry have been quick to react, sharing their insights with us on what this latest rate cut could mean for borrowers, mortgage pricing, and the wider housing market in the coming weeks and months.
Matt Thompson, head of sales at Chestertons, says: “With interest rates now at 4.25%, more rate cuts on the horizon and a number of lenders offering sub-4% mortgages, the property market will undoubtedly see an increase in buyer activity. Particularly motivated will be first-time buyers who were unable to secure a property ahead of the changes to Stamp Duty thresholds and will see the lower interest rates as a window of opportunity to resume their search. House hunters who are in no rush, might wait until the Bank of England announces another rate cut but as buyer demand strongly outweighs the number of available properties, this strategy could see some buyers missing out.”
Tony Hall, Head of Business Development at Saffron for intermediaries comments: “The recent price war among lenders was a clear indication that many had already factored in a potential base rate cut, so today’s news doesn’t come as a huge surprise. While rates will always fluctuate, we’re seeing more competitively priced deals across the board, including sub-4%, which is encouraging for buyers of all types and deposit sizes.
Looking ahead, there’s growing confidence in the market that fixed rates will continue to come down throughout the rest of the year. This comes as the FCA launches a new consultation this week, aimed at making it cheaper for borrowers to switch or change their mortgage. With proposals already in the works to ease current stress-testing rules, it’s clear that regulators are also moving to improve affordability in the market, all of which is good news for potential buyers.”
Alpa Bhakta, CEO of Butterfield Mortgages Limited, said: “The Bank of England’s second rate cut of the year comes at an ideal time. Activity levels in the prime central London (PCL) market improved steadily throughout Q1, and with borrowing costs remaining the most significant driver of sales, today’s reduction should further reinforce the momentum and confidence permeating the property sector. Continued support from lenders for borrowers and brokers alike will be key in ensuring the market fully capitalises on a more supportive monetary environment in the coming weeks.”
Matt Smith, Rightmove’s mortgage expert says: “The much-anticipated second rate cut of the year has arrived, and with some lenders having taken their time to pass on the benefits of the expected Bank Rate cut, I think we may now see further reductions in the coming days and weeks. A fresh round of mortgage rate reductions could be a boost for buyer demand as this year’s Spring Selling season approaches its end. The lowest available five-year and two-year fixed mortgage rates are edging downwards, with the cheapest available two-year fixed rate the lowest it’s been since before the mini-Budget. Since the last rate cut, we’ve also seen how lenders are trying to help home-buyers outside of reducing rates, by reviewing their affordability criteria.
“Looking ahead, there’s still a lot of uncertainty over how trade tariffs may impact the global economy, so it’s difficult to make predictions right now. However, as it stands, the financial markets are forecasting two-to-three more Bank Rate in 2025, which could take us to a rate of 3.75% by the end of the year. In the short-term, I think movers can expect average mortgage rates to trickle downwards over the next few weeks but not dramatically.”
For Sarah Thompson, Managing Director at Mortgage Scout, today’s announcement is also a welcome move as she comments: “The decision to cut the base rate today is a timely and much-needed boost for borrowers. After a prolonged period of high interest rates, this shift should help ease affordability pressures and unlock more movement from first-time buyers and homeowners. We’re already seeing signs of renewed confidence with searches for remortgaging up by 34% in Q1, according to Legal & General, as borrowers look ahead to what rates might be when their current deals come to an end. At the same time, several lenders have recently increased their income multiples, further improving affordability and opening up more options for borrowers.
“With around 1.8 million fixed-rate mortgages due to mature by the end of 2025, today’s rate cut offers some welcome relief – but it’s just the start. If rates continue to fall towards the predicted 3.5% by year-end, we expect even greater momentum to build across the market.
“Equally significant is the FCA’s announcement yesterday, following its open letter to the government in January calling for a more growth-focused regulatory approach. The FCA has now confirmed plans to launch a formal consultation in June, aimed at making it ‘easier, faster, and cheaper for borrowers’ to make changes to their mortgage. This is a vital step towards a more flexible and responsive lending environment. Together, these developments send a clear message: the market is beginning to shift back in favour of borrowers.”
Darrell Walker, group sales director at Chetwood Bank for ModaMortgages and CHL Mortgages for Intermediaries, said: “This latest reduction to the base rate is another step in the right direction. As borrowing costs ease, we expect to see investor activity increase – particularly as the data so far this year has pointed towards a stable and growing market. This cut should deliver a further confidence boost and stimulate broader market momentum, even if some buyers do opt to sit tight until further base rate cuts arrive.
Michael Sacks, director at Sacks Properties, comments on the impact on the property investment market saying: “The Bank of England’s decision to cut interest rates not only lowers borrowing costs, but alters the psychology of the market. After months of stagnation and caution, we’re at the tipping point of a new cycle. Investors who’ve been sitting on the sidelines are now facing a rare convergence of opportunity.
“For both seasoned and first-time investors, the economics of property are shifting. Mortgages are becoming cheaper, while rental demand continues to climb, ultimately leading to higher investment returns.
“The golden age for property investment is definitely coming. With house prices expected to increase dramatically and rental returns strengthening, this rate cut could be the turning point that re-energises the market. Savvy investors will undoubtedly be turning their attention to the UK property market.”
Paresh Raja, CEO of Market Financial Solutions, said: “The markets inked in this base rate cut several weeks ago, with many lenders having already dropped rates over the past fortnight. As a result, today’s decision might be met with a somewhat muted response. But we should be careful not to take another 0.25% reduction for granted; rates are trending in the right direction and borrowers will welcome every cut.
With more rate cuts expected in the months to come, some property buyers and investors might decide to bide their time. But there’s an overwhelming sense that demand is returning to the market thanks to the increasingly favourable interest rate environment. Coupled with the usual seasonal trends we see, we’re expecting the summer months to be a busy period, and the focus from lenders has to be on fast, decisive action – giving brokers and borrowers clarity on product availability and rates, along with prompt decisions on applications, will be crucial in allowing the market to flourish.”
Tim Parkes, CEO of RAW Capital Partners, said: “The only real question today was seemingly whether the Bank of England would be so bold as to vote for a 0.50% reduction. For now, the Bank is clearly sticking to a conservative strategy and, while there is pressure for more significant cuts, the broader expectation is still that there could be as many as four more base rate cuts from the Bank’s five remaining meetings this year.
“We are on the right path, even if the speed of travel is not fast enough for some. The base rate is now a full percentage point lower than the recent 5.25% peak we saw for much of 2023 and 2024. If indeed the base rate does continue to fall to 3.5% or even 3.25% by the end of this year, it will likely encourage many more property buyers and investors to enter the UK property market. Transactional activity and house prices could both see an uplift as a result, particularly as mortgage lenders reprice their products to reflect the medium-term predictions of a steadily falling base rate.”
Tim Foreman, Managing Director of Land and New Homes, LRG said: “Today’s reduction in rates is very welcome. It’s all too well-known that housebuilding figures are way below where they need to be to meet the government’s ambitious targets – in fact they’re even below housebuilding output last year.
This is due to many factors, including build costs, finance costs and a lack of demand in the market. The reduction in interest rates, not only today but, we anticipate, in a series of decisions over the next year, will help address each of these factors and result in a more buoyant housing market.
And growth in the property market isn’t just down to economics – it’s also important to consider the psychological aspect to the housebuilding process. Sentiment is a huge factor in stimulating the market. People need to feel safe in their decision-making and having more security in their borrowing is an important factor.
Issues will remain. Specifically, there is an urgent need to help first time buyers get a foothold on the property ladder. But today’s news is welcome news.”
Following today’s Base Rate announcement by the Bank of England, Alan Davison, Chief Commercial Officer of Afin Bank, commented:
“Today’s Base Rate cut was never in doubt as the economy desperately needs a boost, but I’m not sure it will immediately trigger an increase in mortgage demand.
Nationwide reported a 0.6% drop in house price growth in April, following a jump in transactions in March as buyers rushed to beat the stamp duty changes. Whether that recovers in the coming months depends on consumer confidence, which is thin on the ground.
Growth predictions for the UK economy have been cut, while inflation is expected to rise again, leading to higher prices and further pressure on household finances. So the big question is could we see further rates cuts from the Bank of England, which could cause borrowers to hold fire on their mortgage plans until interest rates have stabilised.”
Simon Capp, Head of Residential Sales, British Land, commented, “The Bank of England’s decision to cut the base rate to 4.25% is particularly welcome given recent buyer hesitation linked to the global economic outlook and stock market fluctuations. Improved mortgage affordability will undoubtedly motivate some buyers sitting on the fence to commit to purchasing in 2025. Today’s decision will hopefully help to stimulate the housing market and provide wider economic benefit for UK Plc as homebuyers purchase additional goods and services as part of the home moving process.”
Adrian MacDiarmid, Head of Mortgage Lender Relations at Barratt Redrow Developments, comments: “The cut in interest rates is a good thing. At the start of the year mortgage rates dropped, and we’re already seeing a lot of lenders competing for market share with lower rates, which will bring more opportunities to buy a home.
“Improving affordability assessments means that prospective homebuyers might also be able to borrow more than expected. For example, by opting for the security of a long-term fixed-rate mortgage, this could enable them to borrow up to six times their income.
“Choosing the right type of mortgage is important, as it can help save you a lot of money. While a fixed-rate mortgage is the most popular option overall, there are a lot of new products available now tailored to specific buyers.
“For example, at Barratt Redrow we offer a Key Worker Scheme which enables anyone working for the NHS, the police, fire service, and for local authorities and education, to get up to £15,000 towards their deposit.”
Sharon Beedham, Relationship Director at ONP Solicitors said:
“Even a modest 0.25% cut can have a ripple effect, especially in a market as sentiment-driven as property. Buyers and homeowners alike have been looking for signs that affordability is improving — and a small base rate reduction, even if largely symbolic, could be just enough to restore some consumer confidence.
For those conveyancers who saw intense activity leading up to March’s stamp duty deadline, this could be the catalyst that helps smooth what might otherwise have been a prolonged lull. We may not see an overnight spike in completions, but this kind of incremental shift could encourage more remortgaging activity and keep the sales pipeline ticking over. From a sector perspective, it’s about interpreting market signals and being ready to respond to renewed buyer intent, however subtle.”
Ben Thompson, Deputy CEO, Mortgage Advice Bureau comments:
“Today’s rate drop won’t come as much of a surprise, especially considering recent goings on across the pond. Despite inflation being likely to tick up again in the near term, the focus has now flipped to ensuring economic growth. Markets have been quick to price in future rate cuts, and consequently, it’s great to see so many mortgages now priced below 4%.
We now have real wage growth, lower mortgage rates, and a favourable rate outlook, plus a record high number of mortgage products overall. We’re even seeing some helpful lending for first time buyers, and hopefully that continues to grow, enabling more renters to become homeowners.
Notwithstanding what has recently become ‘predictable unpredictability’ globally, it feels as though we have a small tailwind for the first time in a long time (at least domestically). It does now feel like a good time to buy, and a better time to refinance for those that need to.
For customers looking to get mortgage ready, now is a great time to take advantage of the market. With the expertise and guidance of a broker, you can secure a deal that works for you and your financial circumstances.”
Richard Pike, chief sales and marketing officer at Phoebus Software says: “The Bank of England’s decision to cut the base rate is not unexpected and reflects growing concerns around slower economic growth and trying to ease inflationary pressures. For the mortgage market, the big question is how this move affects swap rates, which had already been trending down in anticipation of today’s announcement. If we see sustained downward movement in swaps, lenders may begin pricing more competitively in the coming weeks, particularly in the fixed-rate space.
However, geopolitical factors such as the recent announcement of US tariffs by Donald Trump have injected volatility into global markets and inflation forecasts, which in turn could limit how far UK rates fall in the medium term. The industry will need to remain agile in response to both monetary policy shifts and wider economic turbulence.”
Nathan Emerson, CEO of Propertymark, comments:
“Today’s news will no doubt be extremely welcome for many, especially given current economic uncertainties. International bodies have recently stated they expect interest rates to fall in the UK as the year progresses. Overall, we hope to see interest rates further continue their downward trajectory over the course of 2025.
The UK housing market has recently been buoyed by Stamp Duty threshold changes leading up to the start of April, and with the busier spring and summer months now here, this base rate reduction should attract even more buyers and sellers to the market and provide greater affordability.
Housing is a central part of the UK economy, and we now hope to see considering the UK Government and the devolved administrations have shown a keen focus on housing growth, is that they look ahead to achieving their individual housebuilding targets to meet growing demand.”
Simon Webb, managing director of capital markets and finance at LiveMore, comments:
“While this move may not immediately transform mortgage rates, today’s rate cut will provide relief to many borrowers, especially those coming to the end of fixed-rate deals or navigating affordability challenges in a high-cost environment. “For older borrowers, many of whom are on fixed incomes, a reduction in rates can be crucial in easing monthly payments or improving affordability assessments. It’s important that we continue to see innovation and competition in the later life lending space, so that more people aged 50 and over can access the finance they need without being unfairly penalised by outdated criteria or economic headwinds.”
Commenting on the Bank of England’s interest rates decision, Colin Bell, Chief Operating Officer at Perenna said:
“Today’s rate cut is a reflection of the UK’s slowing economic growth – despite the broader, global economic uncertainties, the need to stimulate spending at home is clearly the priority for the MPC. This will undoubtedly be positive news for many home buyers and those looking to remortgage, offering some relief and creating some demand in the short-term. But for many aspiring homeowners, the impact will be limited – the latest research from the Adam Smith Institute highlights the stark reality for English renters who work 125 days a year just to pay their landlords leaving them struggling to save for a deposit. Even those who do have a sizeable deposit remain locked out of traditional mortgage options thanks to stringent affordability rules.
If policymakers are serious about addressing the housing crisis, they must go beyond rate cuts and tackle the structural barriers to homeownership. The FCA’s consultation on simplifying mortgage rules is a welcome first step as this will make it easier for homeowners and potential buyers access to a broader variety of solutions that fit their needs throughout the life cycle of their mortgage. We look forward to seeing what comes of the public discussion in June.”
Kevin Roberts, Managing Director of L&G’s Mortgage Services business, comments on the Bank of England’s interest rate decision:
“Today’s decision to cut the base rate by 0.25% will be very welcome news for many homeowners and prospective homebuyers, and this will likely boost confidence in an already buoyant market. If you are looking to buy, or remortgage, now is a great time to consult with a mortgage broker to take advantage of this opportunity. We’ve already seen many lenders reduce their rates, and competition between providers will bring more tailored products to the market. We know the demand is there – our broker mortgage search data shows first-time buyer and remortgaging activity jumped 45% and 34% respectively since last year.”
Ryan Etchells, Chief Commercial Officer at specialist property lender Together, said: “The fallout from US President Donald Trump’s policy on tariffs has caused a huge amount of instability, leading to economists predicting a slowing global economy.
To combat the likelihood of US policy depressing the UK economy, The Bank of England’s has decided to cut its base rate by 0.25% to 4.25%, lowering the cost of borrowing for individuals and businesses, which will provide a much-needed boost to the UK property market.
It will mean those who were facing steep monthly mortgage payments will now be able to access lower rates, allowing more home buyers who would previously have been priced out of the market to achieve their property ambitions.
Homeowners on variable rate and tracker mortgages will also feel the benefits of the central bank rate cut, as will buy-to-let landlords, who have had to contend with higher costs and increased red tape over the past few years.
Despite these recent challenges, our latest research reveals a resilient buy-to-let market, with a third of those landlords planning to expand or diversify their portfolio in the next 12 months. Those keen to seize an opportunity and move forward with their property plans are best to consider the wide range of financial products available, such as commercial and buy-to-let and commercial mortgages or bridging loans for fast, flexible finance.”
Jonathan Handford, Managing Director at national estate agent group Fine & Country, comments: “The UK economy has been handed a cautious boost, as the Bank of England takes action to steady growth and ease pressure on households and businesses.
With inflation cooling and global uncertainty mounting, the move signals a shift towards supporting recovery.
With inflation dropping to 2.6% and signs that growth is slowing, the Bank made the move to help steady the ship. New tariffs introduced by the US have added to economic jitters, with global trade tensions starting to bite. The cut is designed to support households and businesses as the economy faces a tricky few months ahead.
For homeowners and buyers, this is welcome news. Mortgage rates had already started to come down in anticipation, and today’s decision could lead to even better deals, especially on fixed-rate products. That’s good news for first-time buyers and anyone looking to move, at a time when affordability is still a major hurdle.
The cut also comes during what’s usually a busy time for the housing market. With spring activity already picking up, lower borrowing costs could give the market an extra push, helping more people take the leap.
While the Bank hasn’t ruled out further cuts later this year, it’s treading carefully. For now, though, today’s move offers some relief and a glimmer of encouragement for buyers and homeowners alike.”
Commenting on a minor interest rate cut impacting those managing significant debt amidst a delicate balancing act, Daniel Austin, CEO and co-founder at ASK Partners, said: “The Bank of England’s modest rate cut underscores the delicate balancing act it faces amid global uncertainty, Trump-era trade tensions, and the UK’s impending tax reforms. While the move signals a step toward monetary easing, the real impact depends on how quickly lenders pass on the change through lower mortgage rates and whether this trend endures. For homeowners and buyers, the desire for more affordable borrowing is clear, but fixed-rate mortgages remain stubbornly high, suggesting any short-term relief may be modest. However, a more predictable rate environment could help rebuild buyer confidence, especially among those waiting for greater clarity.
For investors and developers, the trajectory of interest rates remains crucial. Even today’s modest cut will significantly impact those managing large debt loads. Resilient demand in high-growth segments like co-living and build-to-rent continues to attract capital despite ongoing supply constraints. With the UK facing potential political and fiscal change, real estate players must stay agile. Should further rate cuts materialise, we could see a stronger recovery in both deal activity and investment flows. Until then, uncertainty persists, and smart, forward-looking financial planning remains key to navigating what’s next.”
John Phillips, CEO of Just Mortgages and Spicerhaart, said: “Today’s decision was clearly not a surprise, with financial markets pricing in a cut with unanimous certainty. What will be interesting though is what happens next and whether today’s call is the opening of the flood gates for further and more frequent cuts – with some predicting three or even four more cuts in 2025. While there’s no question that President Trump’s trade war has forced the central bank to act with some urgency, so have fears around inflation and both business and consumer confidence – particularly in response to higher taxes and costs.
Either way, movement on the base rate is absolutely welcomed and will certainly help to stimulate demand. Given the certainty around today’s news, we’ve already seen swaps respond positively and lenders re-price, with the competition for market share likely only to increase with future moves. If not already, now is the time for brokers to mobilise – to get out into their local area to share this update. It’s so easy to get bogged down by the news right now, when in fact we can share something really positive with the many who have the appetite to buy, but need help navigating the market.”
Commenting on the Bank of England interest rate decision, Joe Pepper, UK Chief Executive Office at PEXA, said:
“1.8 million fixed-rate mortgages are set to expire this year, so the possibility of a cheaper remortgage will be music to borrowers’ ears. We will likely see an increase in demand for both remortgages and new transactions, especially as lenders have also been responding to moves by the regulator to loosen affordability criteria.
As demand recovers for both remortgaging and homebuying, it is vital that we address the underlying strain on the hidden infrastructure behind the housing transaction to meet the Government’s lofty homeownership goals. The industry met the challenge that the Stamp Duty deadline rush brought, but the pressure on conveyancers’ capacity cannot be ignored. The Government’s intention to digitise parts of the homebuying process is a positive step, but we need to see more detail before we can judge whether or not it will be enough to support a vibrant housing market that an interest rate trending downwards will bring.”
Rob Owens, Head of Research at e.surv said: ”As the Bank of England edges closer to its second base rate cut this year, lenders should prepare for a modest but meaningful shift in market dynamics. While any reduction is likely to be gradual, it will nonetheless signal a turning point in the interest rate cycle – offering scope to reprice mortgage products more competitively and potentially unlock pent-up demand.
However, the impact won’t be uniform. More affordable regions may see more immediate activity, while London and the South could remain subdued.
Remortgage business is also expected to pick up, with an estimated 740,000 borrowers fixed terms set to expire over the course of the year. While mortgage rates may be less favourable compared to the mortgage rates pre-2023, borrowers can take some comfort from rates falling below 4.0% in recent days. Those planning to remortgage should explore their options well before refinancing.
For lenders, this presents an opportunity to reassess product ranges, affordability criteria, underwriting strategies, and retention offers. While we won’t return to the ultra-low-rate environment of the 2010s, a more stable, lower-rate landscape should help restore borrower confidence and support a gradual return to the lending volumes last seen 2022/23.”
