The Bank of England has lowered the base rate of interest to 4% today following market forecasts of a cut. The 0.25% fall takes the new interest rate to levels not seen since the beginning of 2023. This is great news for the property world.
Andrew Bailey, governor of the Bank, said: “We’ve cut interest rates today, but it was a finely balanced decision. Interest rates are still on a downward path, but any future rate cuts will need to be made gradually and carefully.”
Is the interest rate cut good for property?
The Bank’s decision to cut the rate to 4% is good news for the property market in the following ways:
That comes on top of news today that UK house prices are currently rising at their fastest rate for six months.
The Bank of England making it cheaper to borrow will reinforce the good news for both homebuyers and investors.
Will the base rate come down further this year?
Many market analysts think we are in line for a further cut this year, but as always it depends on the overall economic picture. For example, if inflation keeps rising it will be an important factor for the Monetary Policy Committee (MPC) to consider.
The MPC itself was split and only passed the latest cut by a small margin, suggesting that they may need some persuading to make another cut this year.
However, homebuyers should only be encouraged by the latest news.
Is this a good time to buy property in the UK?
The interest rate cut means that this could be the best time to buy property for at least the last two years, thanks to lower borrowing costs.
Buy-to-let rates are now available from as little as 2.88% at 75% loan-to-value on new build apartments. This means our clients can benefit from incredibly healthy cash flow and a return on investment of over 16% on our exclusive Developments.
Combine that with higher rates of house price growth and buyers can win at both ends of the transaction – lower costs and higher gains – but only if they buy now.
Want to buy UK buy to let property and make the most of a growing property market? See our available UK investment property for sale and get in touch with the team today.