Today’s announcement from the Bank of England that the MPC has decided to cut UK interest rates from 5% to 4.75% had been widely anticipated by city experts – as well as mortgage and property professionals,
With UK inflation coming in below the Bank’s 2% for the September print at 1.7%, it’s clearly given the MPC enough scope to make this further cut to interest rates. The rate cutting cycle was started in August, when the Bank cut rates from 5.25% to 5%.
It’s good news of course, for those looking to remortgage or to buy their first home – for whom the cost of borrowing has proved to be a real headache this past few years as the cost of living crisis hit the property market hard.
In response to today’s interest rate news, mortgage and property professionals have been sharing their views on what it means for mortgage rates, for the property market as a whole and for first time buyers as follows:
Rachael Hunnisett, director, longer-term lender April Mortgages, comments: “Today’s rate cut has been on the cards since inflation plummeted to a three and a half year low. While it may not be a surprise to markets, it will be welcome news to borrowers, in particular those on variable rate-mortgages. As for the Bank of England, it is still walking somewhat of a tightrope when it comes to managing the economy.
“Inflation dipping below 2% was a positive step forwards, but balancing rising consumer prices and central bank policy remains a delicate challenge. For financial markets, particularly SWAPs that drive mortgage pricing, this inflation trend has been closely monitored.
“The anticipated November rate cut was already priced into market expectations, making today’s adjustment well-aligned with long-standing projections. However, the future is far less certain and this presents a quandary for homeowners.
“Mortgage customers will have to carefully weigh-up their long-term plans and risk tolerance when selecting a fixed-rate product. In an unpredictable market where rates are likely to fluctuate, choosing the cheapest two-year is not the solution for every borrower.”
Robert Pritchard, Head of Capital Markets, Cohort Capital said: “Today’s rate cut brings some much-needed – albeit marginal – relief for both personal and commercial property owners. While the market continues to offer significant opportunities, the landscape has been slightly more challenging over the past few years and this reduction will offer immediate support to those on floating rate loans. It will also provide a shot in the arm for those looking to acquire or refinance assets.
“However, for this cut to truly impact the property market, it needs to signal a sustained downward trend, as personal and commercial property lending is heavily dependent on the market’s view of rates over a three-to-five year period. The fiscal loosening outlined in the government’s budget last week, along with a second presidency for Donald Trump, would suggest a sharp drop in rates is unlikely, but many hope that the drop in inflation could provide the central bank with more room for further reductions.
“Whilst not affected as much as the main residential market, the prime property sector has been impacted by the rise in interest rates, so the reduction by the BOE will be welcome. However stable government policy and economic growth are the main drivers in this market. If the country cannot offer this it will not capture the benefits that a thriving prime property market can bring to the economy and public purse of the UK.”
Jamie Pritchard, Managing Director of Sales at residential lender Glenhawk: “Despite last week’s unnerving Budget, the MPC needs to persevere with an aggressive rate cut programme. Given the current macroeconomic trajectory, the target should be a minimum of three further rate cuts by next Summer, bringing the base rate down to 3.75%. With wage growth having cooled more than expected and the very real possibility of deflation kicking in, the MPC has the means to give the economy the support it needs. House prices have continued to surge, although the new stamp duty surcharge is likely to pressurise buy-to-let transactions, and cheaper financing will be critical in helping bring forward the supply that is necessary across the country.”
Richard Pike, chief sales and marketing officer at Phoebus Software, said: “Following the UK Budget and the US election result, overall, the markets are reacting positively. Coupled with lower-than-expected inflation figures last month, today’s Rate cut is not unexpected and means we can look forward to a strong finish to the year.
“We shouldn’t expect a massive change in fixed mortgage rates than those already planned by lenders, and with inflation looking like it will rise again moving into 2025, another cut in December is looking more unlikely.
“With such a constantly evolving economic picture, consumers may continue to struggle on product choice, but with more choice continually coming to market this shouldn’t affect gross mortgage lending figures moving forward”.
Nathan Emerson, CEO of Propertymark, comments: “Today’s announcement will be welcome news for buyers, especially for those who may have been delaying any house move due to potential uncertainty on their overall affordability. With the Bank of England’s most recent Money and Credit Report revealing net mortgage lending has further increased by 0.9 per cent in September, up on the 0.7 per cent seen in August, coupled with proposed changes to Stamp Duty thresholds from next April, it’s highly likely we may see buoyant activity in the market across the winter months.”
Richard Carter, CEO of Lenvi: “Borrowers will feel even more reassured by interest rates dropping further to 4.75%, following the Autumn Statement last week. The announcement of stabilising inflation rates and peoplebreathing a sigh of relief after no increases to Capital Gains Tax for residential properties should help to stimulate growth in the housing market. While we need to be cautiously optimistic, these measures in principle should stabilise mortgage rates, which will start to restore home buyer confidence and make it easier for first-time buyers to achieve home ownership.
“Our latest research on consumer habits found that four in ten (39%) borrowers listed ‘low interest rates’ as their biggest priority when choosing a lender. With this in mind, many of our customers will likely be anticipating increased mortgage activity, and will need to prepare to scale, ensuring they have the correct processes and quality systems in place.”
Paul Noble, CEO of Chetwood Bank (formerly Chetwood Financial), said: “This is very welcome news. Following the Budget, in which property ownership came under the spotlight, today’s decision brings some positivity to the mortgage market.
“Looking at the bigger picture, there are challenges for landlords to wrestle with, whether that’s the Stamp Duty surcharge, tax changes or regulatory reform, but the buy-to-let market has consistently shown itself to be resilient in the face of adversity. Ultimately, it’s the cost of borrowing that will be the major influence on people’s property buying plans, so today’s cut – and the hope of more to follow – will encourage greater market activity among landlords and homebuyers in the coming months.
“To allow momentum to build, and to effectively support buyers re-entering the market thanks to a falling base rate, it’s crucial that lenders are focused on delivering certainty. Brokers want lenders they can trust and pain-free applications – providing that will be key if the market is to restabilise after all the uncertainty surrounding the Budget.”
Tim Parkes, CEO of RAW Capital Partners, said: “The main threat to an interest rate cut today was the fallout from the Autumn Budget. The Bank was evidently reassured enough by the reaction of the markets, although the Chancellor’s growth-focussed policies did result in an uptick in the OBR’s inflation outlook, which could have heightened tensions ahead of today’s vote on the base rate.
“Evidently the Monetary Policy Committee (MPC) does not view Reeves’ stimulus as substantial enough to justify delaying cuts, suggesting that we are in a transitionary phase where a more accommodative monetary stance is increasingly favoured on Threadneedle Street. Decelerating wage growth likely supports this view, though it’s important to note that the Budget may slow the pace of future cuts. Indeed, with services inflation still a persistent issue and consumer spending expected to rise over the festive season, the CPI could tick up in the coming months, potentially resulting in a slower pace of base rate cuts than previously predicted.
“That said, the bigger picture is encouraging. Any rate reduction is positive news for the lending and property markets. Although rates may never return to the historic lows seen between 2008 and 2021, they are trending in a favourable direction, making it easier for homeowners and investors to manage both current and future loans. Looking ahead to 2025, we expect specialist finance demand to grow, provided that brokers and lenders can support borrowers with the financial products and expertise they will need to navigate the changing political and economic landscapes with confidence.”
Ross Turrell, Commercial Director at CHL Mortgages, said: “Today’s rate cut injects some much-needed positivity back into the mortgages and property market after the turbulence stemming from last week’s Budget. It also highlights the variety of trends and challenges that UK landlords are currently having to navigate. On one hand, rates are falling while property prices continue to creep upwards; on the other, new regulations and tax reforms are sparking questions about how best to manage portfolios.
“But when is the BTL market not facing challenges? Over the past decade it has been subjected to a great deal of change, yet it has proven resilient and shown positive performance despite the challenges it has faced. The cost of borrowing is a critical factor in driving demand for property investments, so the continuation of rate cuts by the Bank of England ought to trigger greater activity across the property market in the months ahead.
“However, crucially, as a lender, we cannot let rates dominate conversations with brokers and borrowers. We have to see the bigger picture, and this means supplying clients not just with the right products, but the additional expertise and support they need to navigate an ever-changing market. If lenders can provide these qualities, there’s every reason to believe today’s rate cut will translate into a more robust and fruitful market as we close out the year.”
Paresh Raja, CEO of Market Financial Solutions, said: “The market will breathe a sigh of relief. A cut always looked likely, but the turbulence of the past week – the Budget and US election – could have encouraged the Bank of England to hold. Lenders are able to pass lower rates on to borrowers, providing a much-needed boost to homebuyers and property investors alike. We anticipate that the market will gain momentum in the coming weeks as it adjusts to a more accommodating – though still challenging – monetary environment.
“The past few months have provided a timely reminder that the actions of Threadneedle Street typically exert a greater influence on market activity than decisions made in Westminster. The house price growth following the Bank of England’s last rate cut in August reflects this impact, and today’s cut should inspire further confidence. It’s therefore crucial that investors prepare for a likely surge in market activity and position themselves to seize any opportunities that could soon emerge.
“However, it’s important to recognise that interest and mortgage rates remain significantly higher than pre-December 2021 levels. As a result, securing suitable financing options will still be a significant challenge for some borrowers – this is where the specialist lending sector will continue to play a vital role. To help build momentum in the property market, lenders must now step up and focus on providing a diverse range of bespoke and flexible financial products that can meet the specific needs of brokers and their clients.”
Guy Gittins, CEO of Foxtons, said: “Whilst homebuyers will have been disappointed about the lack of a stamp duty relief extension in last week’s Autumn Budget, news today that interest rates have been cut will certainly help to boost their mood.
“The UK property market has already been showing strong signs of recovery in 2024 and this has been driven by improving market sentiment as a result of a more stabilised lending landscape. We also tend to see a wave of new buyer interest following a cut to interest rates, as those previously priced out of the market re-enter the fray and so today’s news will no doubt entice more buyers to make their move.
“With a stamp duty deadline now looming, we expect to see a supercharged level of market activity in the coming months as buyers look to complete before 1st April next year. Today’s decision to cut rates will only help add to this increased momentum and we now look set for a very strong end to the year and an even stronger start to 2025. There currently remains a good level of stock on the market, so whilst demand is set to climb, it’s unlikely to drive house prices to the same extent as it would in an under supplied market.”
Stephanie Daley, Director of Partnerships at mortgage advisor Alexander Hall, commented: “We’ve already seen mortgage rates trending downwards in recent months due to a higher degree of mortgage market stability and many within the mortgage sector will have already been anticipating today’s base rate cut.
“As a result, it’s unlikely we will see an immediate reduction in the current rates on offer to homebuyers and movers. However, today’s cut will bring further confidence to those looking to move, many of whom had previously delayed their plans due to higher rates, and this release of pent up demand will help to cultivate further property market positivity.
“Couple that with the increase in stamp duty as of April next year and we expect to see a rise in demand over the short term, which will also help to boost buyer confidence and potentially speed up transactions.”
Robert Sadler, Vice President of Real Estate at Excellion Capital: “While today’s cut to base rates is welcome news, we remain wary that any positivity will be muted by the negative impact of the recent Autumn Budget and the inflationary policies announced therein, the result of which is going to be a higher level of government borrowing than anyone predicted.
“The fallout of the Budget’s inflationary pressures are also likely to mean that this is the only base rate cut we see for the remainder of 2024.
“On a positive note, we know from history that markets tend to overreact to bad news such as the Autumn Budget, after which they do eventually settle because certainty is more secure than possibilities and promises, even if the picture created by that certainty is less than perfect.
“And because of this certainty, we fully expect the base rate cut to result in a fall in swap rates, but due to the aforementioned impact of the Budget, this swap rate drop will be smaller than previously expected.”
CEO of specialist lender Octane Capital, Jonathan Samuels, commented: “Today’s decision to cut interest rates will bring some early festive cheer to the nation’s homebuyers who may still be haunted by the lack of a stamp duty relief extension in last week’s Autumn Budget. In fact, it’s fair to say that the long-term benefit of lower interest rates and the resulting increase in mortgage affordability is likely to entice more buyers into the fold compared to the number that might be deterred due to higher stamp duty costs.
“So all in all, today’s news will be warmly welcomed and we expect to see property market momentum continue to build, as buyers respond positively to improvements across the lending landscape.”
Tony Hall, Head of Business Development at Saffron for Intermediaries, comments: “Today’s decision to cut the base rate to 4.75% is a positive move for the broader housing market. Over the last month, we’ve seen mortgage approvals rise, hitting 65,650 in September – the highest figure in two years. This shows market confidence is growing, and lower rates prompted by the Bank’s latest cut could further stimulate lending by offering customers greater affordability when choosing a mortgage. With the dust now settling on the recent Budget, we’re expecting a more positive outlook going into 2025.
“However, in this more complex market, it is essential that buyers and those looking to remortgage seek out professional advice. Every individual’s circumstances are different and brokers can help them find the right product to suit their needs.”
Arjan Verbeek, CEO and Founder of Perenna said: “If Rachel Reeves deployed a fiscal bazooka in the Budget, the Bank of England has continued to draw on its own arsenal to drive down borrowing costs and support growth.
“Lower rates alone don’t buy houses, so while this is change will be welcomed, it’s not going to move the dial materially for frustrated first timers. In reality, rate changes alone won’t tackle the affordability crisis we have in the UK. Plenty of potential homeowners already pay a lot more in rent than they would if they could secure a mortgage on current rates.
“The issues stem from their ability to secure finance in the first place. The restrictions placed on lenders via the loan-to-income cap only compound this problem, preventing individuals and families into homeownership who could afford it.”
Kevin Roberts, Managing Director, Legal & General Mortgage Services comments: “The mortgage market has really opened up since the Bank of England announced its first cut in August, with borrowers finding dynamic and cheaper products in front of them. And while there’s recently been some uncertainty tied to the Autumn Budget and US election, today’s decision should reassure borrowers that rates are on a downward trend.
“For those contemplating their next move in the mortgage market, they should consider consulting a professional mortgage adviser. This gives people the best chance of navigating changing rates and landing a product that fits their needs.”
Karl Wilkinson, CEO of Access Financial Services, said: “Today’s BoE interest rate cut is solid evidence that years of inflationary shocks have now been put to bed. It’s particularly good news for first-time buyers determined to get out of rented accommodation. That said, many FTBs will still struggle to raise a deposit, which is where a 0% deposit mortgage will help.
“Economists were widely expecting this cut, bearing in mind that inflation is remaining around the MPC’s 2% sweet spot. However, we’ll be interested to read the Bank’s latest quarterly economic forecast to see what effect they think that the increased Government borrowing that Chancellor Reeves announced in the Autumn Budget will have on future rate cuts.
“Moving forward, we’ll probably see fewer cuts than previously expected due to the extra inflationary pressures, rises to the national living wage and employers’ national insurance.”
Sarah Thompson, Managing Director, Mortgage Scout said: “Great news for first-time buyers and homeowners: the Bank of England’s base rate cut to 4.75% brings potential for more affordable mortgage options. For those on variable rates, this change could mean around £20 in monthly savings. Recent market trends show two-year fixed rates dropping more than five-year options, as many predict further rate cuts into 2025.
“While the base rate plays a crucial role, international market dynamics have influenced swap rates, which have seen greater fluidity over the past month. Mortgage rates have already adjusted downward in anticipation, so significant short-term shifts are unlikely.
“Despite inflation concerns stemming from the Autumn Budget, current conditions make it an excellent time to buy, especially with stamp duty relief for first-time buyers until the end of March. Now is the perfect moment to take that first step onto the property ladder. At Mortgage Scout, we’ll ensure your mortgage offer is updated to the most competitive rate if market rates fall before your completion.”
Paul Hardy, Managing Director of LSL Estate Agency Franchising: “The 0.25% cut in interest rates announced today, although widely anticipated, is good news for the housing market. A cut in interest rates typically makes mortgages more affordable and could create just the boost in demand needed to carry us into the New Year and promises well for 2025. It might also tempt investor landlords – who are smarting from the stamp duty hike on second homes –to explore financing options. An increase in demand would also be good news for house prices, which seemed to falter a little in response to last week’s budget. All in all, this 4.75% will be welcomed by our franchise partners across the UK.”
Warren Martin, Director of Operations at ONP Solicitors, part of Movera: “Today’s rate cut from the Bank of England is a welcome step for the housing market and couldn’t be better timed. At ONP, we’ve seen transaction volumes taper off over the last two weeks, with many prospective buyers and remortgagers sitting tight in anticipation of this announcement. Now, with this decision, we hope to see lenders release some appealing, competitive mortgage products in the run-up to Christmas, which would help stimulate the market at year-end.
“This rate reduction is particularly encouraging for first-time buyers and those facing remortgage deadlines in 2025—an estimated 1.8 million homeowners who might otherwise be bracing for steeper repayments. Although some payment increases are likely inevitable, today’s decision should go some way to soften that blow.
“Additionally, with the government’s recent measures to increase affordable housing, boost small housebuilder guarantees, and restrain speculative investments, this rate cut should enhance affordability across the board. All eyes will be on the upcoming CPS inflation figures on the 20th to see how these moves will translate to everyday costs, but today’s announcement certainly signals a positive shift for both affordability and accessibility in the housing market.”
John Fraser-Tucker, Head of Mortgages at mortgage broker Mojo said: “The autumn budget last week notably overlooked the mortgage market, leaving many existing borrowers and aspiring first-time buyers feeling uncertain about their options. It’s completely understandable to feel apprehensive, especially when some mortgage lenders have increased their rates after a period of decline.
“However, today’s decision by the Bank of England to reduce the base rate to 4.75% is a significantly positive move for mortgage borrowers. This second rate cut of the year brings relief to both homeowners and potential first-time buyers.
“We’re optimistic that this change will encourage mortgage lenders, who have recently raised their rates, to rethink their pricing strategies and lower their rates in the coming weeks.
“Existing mortgage holders should be pleased with this decision, as it presents new possibilities for securing better deals or benefiting from adjustments on current products, potentially easing financial pressures. If you’re planning to remortgage in the next six months, a mortgage broker can help you navigate the market and secure a new rate.
“For first-time buyers who have been waiting patiently for a more favourable environment, this could finally open the door to homeownership. Not only are mortgage rates expected to decrease, but first-time buyers also have until March 31 to take advantage of stamp duty relief, which allows you to purchase your first property without paying stamp duty on homes valued up to £425,000. After April 1, this threshold will drop significantly to £300,000, making it important to act quickly in the coming months—especially if you live in regions like the East of England, South East, or London, where the average property price for first-time buyers exceeds £300,000.
“Additionally, last week’s autumn budget announced that homebuyers will face an extra 2% stamp duty on second homes. This change suggests there may be less competition from landlords in the housing market.
“Overall, this move by the Bank of England is nothing short of positive and could mark a significant turning point for the mortgage market, offering both optimism and opportunity for current and future borrowers.”
Daniel Austin, CEO and co-founder at ASK Partners, said: “The Bank of England’s rate cut of 0.25 combined with declining inflation and new fiscal measures, signals a potential shift toward more favourable conditions in the UK property market. House prices have shown consistent month-on-month growth, indicating a possible upward trend into 2025.
“The Autumn Budget’s £5 billion allocation for new homes and a permanent 95% loan-to-value mortgage guarantee scheme aim to boost housing supply and stabilise property values. While this is beneficial for first-time buyers, it may be counterbalanced by lower stamp duty thresholds. Meanwhile, the rental market remains robust, bolstered by incentives like £3 billion in Build-to-Rent housing guarantees, which enhance the appeal for developers. The Affordable Homes Programme also supports SME housebuilders, potentially increasing supply and alleviating market constraints. For property investors, the real estate sector remains a compelling alternative to gilts, with opportunities for growth. Despite the relief from excluding buy-to-let properties from capital gains tax hikes, landlords continue to face higher stamp duty on second homes. This strain on the rental market, driven by limited supply, may temporarily boost the number of properties available for purchase, as mortgage approvals recover to pre-mini-budget levels. Developers focused on co-living and Build-to-Rent projects could benefit from a tighter rental supply—contingent upon favourable planning reforms.
“Private landlords exiting due to rising costs might channel their investments into alternative real estate strategies, such as property debt. These strategies offer attractive tax benefits, with income-based returns exempt from capital gains tax on interest. As CGT liabilities potentially rise, this approach provides continued market exposure with greater financial efficiency, making it increasingly attractive within a shifting regulatory landscape.”
