Bank of England Cuts Interest Rates in Boost for Property Market

In a significant move aimed at stimulating economic growth and consumer spending, the Bank of England has announced a cut to its base interest rate from 4.5% to 4.25% – the lowest level since May 2023.

The decision, made by the Bank’s nine-member Monetary Policy Committee, was not unanimous. Five members voted for the 0.25% cut, two preferred a larger cut to 4%, while the remaining two opted to maintain the rate. The cut is expected to make borrowing, including mortgages, more affordable, though it comes at the cost of lower returns for savers. Faisal Islam, the BBC’s Economics Editor, described the move as “an important moment for the UK economy,” as the central bank also upgraded its forecast for economic growth this year.

Commenting on the development, Malcolm Prescott, Managing Director of award-winning estate agency Webbers, said: “Most people would recognise that the UK property market thrives on positive sentiment and confidence. There is little doubt that this latest cut will be a positive signal to both buyers and sellers contemplating a move this year, particularly first-time buyers who are certainly more prevalent at this time.” Prescott pointed to a wide range of highly competitive mortgage products currently available, including innovative "green" mortgages offering rate reductions of up to 0.25% for properties with an A or B energy efficiency rating. “Fixed-rate mortgages are now far more competitive, with five-year fixed deals starting from just 3.83%,” he added.

According to Webbers, the South West property market is especially well-positioned, with available housing stock up 20% on last year. With more interest rate reductions anticipated, industry analysts forecast house prices could rise by 3–5% by the end of 2025, reinforcing the continued appeal of property as a sound investment.

Malcolm concluded: “Whether buying or selling this year, taking professional advice from a trusted estate agent and financial advisor is critical to ensure that people can take informed decisions – and that is what we are here to do.”