Agents have welcomed the widely-expected 0.25% cut by the bank’s Monetary Policy Committee as inflation fades.
The Bank of England (BoE) is expected to cut its base rate by 0.25% today as its Monetary Policy Committee (main image) shifts focus from cutting inflation to stimulating the flagging economy.
Economists quoted yesterday by both The Times and Sky News have said they expect the cut, a move that has been on the cards since inflation dropped from 2.6% to 2.5%.
This may sound like a small reduction, but inflation remains much lower than the 10% inflation seen during 2022/23, albeit above the BoE’s official 2% target.
The bank’s base rate has been at 4.75% since November last year, although mortgage rates have been softening for several months now in anticipation of further rate cuts and this, much to many estate agents’ relief, has helped boost demand.
Paul Hardy, MD of LSL Estate Agency Franchising says that, assuming the expected rate cut does take place that: “Although widely anticipated, this is good news for home buyers and anyone remortgaging in 2025.
“Every saving on a mortgage repayment helps confidence and this helps the property market.
“2024 was positive and 2025 has started well for our Franchise Partners with strong buyer interest and good sales levels. The drop in the interest rate will serve – in the short term at least – to reassure buyers’ and homeowners, especially as we head towards the 1st April Stamp Duty increases.
“However, for as long as there remains uncertainty over the stability of the economy, further interest rate drops in 2025 cannot be taken for granted. We will proceed with cautious optimism, hopeful that the market will continue positively.”
One area where the sales market has been more difficult is in London, and Camilla Dell of Black Brick says that: “As the government attempts to repair the UK’s flagging economy London’s property market is – for the most part – treading water as 2025 begins.
“But there are signs of resilience, even some bright spots, and if, as predicted, the Bank of England cuts interest rates this month the spring market could mark a turning point.”
