The Bank of England cut interest rates this morning from 4.25% to 4%. For those with a fixed mortgage nothing changes, for those with a tracker mortgage your payments will decrease, or you will be paying off more.
Commenting on the Bank of England’s latest base rate decision, Colin Bell, Founder and COO of Perenna said: “This cut means one thing for certain – the housing market will continue to heat up, fuelled by the narrative that rate cuts would solve all the affordability woes for those looking to get on the ladder. While it is indeed music to the ears of existing owners wanting to sell and upgrade their home, or older generations cashing out and downsizing for their retirements, for first time buyers, it’s more like a screeching violin solo they’re being told they should enjoy.
It is time to take off our rose-tinted glasses and be honest with our young people. The big blocker on housing affordability is the overall price, not the monthly payments. Many young people are already paying a small fortune in rent. We should stop acting like rate drops are a silver bullet solution to their housing woes. In fact, this rate cut will have done very little for first time buyers who simply can’t get over the house price hurdle, let alone secure a low-rate mortgage.”
Simon Dawson, Chief Revenue Officer, at Outra said: “The Bank of England’s base rate remains a central force shaping the UK housing market. Historically, lower interest rates have reduced borrowing costs, encouraged home buying, and supported house price growth. However, this relationship is never purely mechanical; it is influenced by a broader mix of factors, including employment trends, consumer confidence, and developments in the global financial landscape.
“With the Bank of England today deciding on a 25-basis point cut, market conditions appear set to support the current mild house price growth observed across several leading indices. Yet even with this reduction, it’s unlikely to trigger a significant upswing in housing market activity. Instead, a more stable and measured trajectory is expected to continue, barring any major economic shocks.
“While national trends offer valuable insight, real estate professionals and investors alike should be cautious not to overlook regional nuances. Localised supply-demand dynamics, economic resilience, and demographic shifts mean that markets can behave very differently across the country. At Outra, our data has identified several interesting movements in local housing markets over recent quarters, trends that may point to emerging opportunities or early signals of change”.
First Time Buyer is an exciting bi-monthly glossy which takes a stylish and comprehensive look at all the options available, setting them out in an entertaining and informative way, and helping potential customers navigate their way through what is often a daunting and complex process. We dispel the myths, reinforce the facts and arm the reader with the tools necessary to make their homeownership dreams a reality.
