Copy article

Bank of England cuts base rate to 5% in what "will prove to be a shot in the arm for the housing and mortgage markets"

ended 01. August 2024

The Bank of England has today cut the base rate by 0.25% to 5% in what one expert has said "will prove to be a shot in the arm for the housing and mortgage markets". Newspage asked experts for their views on what this means for borrowers, the property market, savers and investors. Their views are below and will keep appearing until 13:00.

21 responses from the Newspage community

Copy all

Star Quote
Copy

Editor
Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
Game on. After a long wait, the Bank of England delivers relief for millions by cutting the base rate by 0.25%. This means someone with a £250,000 mortgage over 25 years could save £440 a year. With this rate cut and fierce competition in the mortgage market, many will beleive it's the perfect time to reignite their property search and get moving.
Star Quote
Copy

Editor
Rohit Kohli
Director at The Mortgage Stop
Today’s reduction in the Bank of England's base rate brings welcome relief to millions of borrowers, much like the incoming respite from the current mini-heatwave. This cut marks a significant turning point for many households, offering a small but meaningful reduction in mortgage payments and providing hope for the thousands still transitioning from ultra-low fixed rates. For those borrowing £200,000 over 30 years, this could mean a saving of up to £360 a year. However, those looking to buy should act quickly since, as demand increases, we may see house prices rise, potentially leading to a return to a sellers' market and making it harder to get on the property ladder.
Star Quote
Copy

Editor
Emma Jones
Managing Director at Whenthebanksaysno.co.uk
The Bank of England has finally seen the light and delivered. This bodes well for the property market and could see activity levels really start to pick up in the latter stages of 2024. Borrowers have been under immense pressure for so long and this move will help alleviate that pressure slightly.
Star Quote
Copy

Editor
Andrew Montlake
Managing Director at Coreco
After much speculation, the Bank of England has finally heeded the calls of existing and prospective borrowers for a much-needed interest rate cut. Whilst the market had already priced such a move in, sentiment is everything and this will prove to be a shot in the arm for the housing and mortgage markets. Had it not moved, the Bank of England would have been accused of being over-cautious and out of touch with the mood on the High Street, but this move shows that they can listen. Although mortgage rates have already been steadily dropping in anticipation of such a move, this will give more lenders confidence to improve their offerings, although borrowers should not expect huge downward spirals. Further reductions will come but these will be very slow and steady as the Bank continues its cautious approach. Nevertheless, this is a day of celebration as a corner has most definitely been turned.
Copy

Editor
Riz Malik
Independent Financial Adviser at R3 Wealth
Finally, the wait is over and the Bank of England has delivered the cut we have all been waiting for. This should be the beginning of a rate-cutting cycle that will take us into 2025, alleviating the pain and misery for many borrowers up and down the country. Don't expect quick successive cuts from the Monetary Policy Committee, which has been slow to act historically, but this is certainly a day to celebrate. This should return some confidence to the property market and estate agents and brokers should brace themselves for a flurry of new enquiries from those eager to move.
Copy

Editor
Ben Perks
Managing Director at Orchard Financial Advisers
The Bank of England have finally loosened their vice-like grip from around borrowers necks. For some it will feel like too little too late, but it will help to provide relief to thousands of borrowers across the UK. This cut will be like a shot of adrenaline in the arm of interest rates and they should start to tumble soon. I'd hope to see lenders' reductions to be much chunkier and by 0.25% or more.
Copy

Editor
Darryl Dhoffer
Founder at The Mortgage Geezer
The Bank of England’s decision to lower interest rates is a welcome shot in the arm for the UK economy. By easing the financial burden on households and businesses, the Bank has taken a significant step towards stimulating growth and improving living standards. Lower mortgage rates will provide much-needed relief for homeowners, allowing them to spend more freely and support local businesses. At the same time, reduced borrowing costs will encourage investment and job creation, helping to secure the UK’s economic future. While inflation remains a challenge, the Bank's decision to prioritise economic growth is a balanced approach. This move demonstrates a clear understanding of the pressures facing the nation and a commitment to supporting the British people.
Copy

Editor
David Stirling
Independent Financial Advisor at Mint Wealth
Finally after seven straight months of impasse, the Bank of England has seen sense and dropped interest rates 0.25% following much pressures over the previous months. Fingers crossed that the lenders pass this onto the beleaguered borrowers with some realistic rates sub-4%.
Copy

Editor
Craig Fish
Director at Lodestone Mortgages
This is long overdue but finally gives some kudos to the Monetary Policy Committee, for doing the right thing. They would have been publicly shamed with any decision other than this. We can now expect a steady reduction, but don't expect any further movement at the next meeting. The mortgage market may now see some increased activity as we head into 2025.
Copy

Editor
Justin Moy
Managing Director at EHF Mortgages
Better late than never from the Bank of England. This is the perfect summer tonic to brighten the soul of mortgage borrowers in particular. This may only be the start of the downward journey for the base rate, but the optimism and confidence shout louder. This will be a huge positive sign for businesses and mortgage holders, encouraging more people to spend in the high street and look at buying property. It is only a start, so don’t expect half-price mortgage rates just yet.
Copy

Editor
Stephen Perkins
Managing Director at Yellow Brick Mortgages
The decision from the MPC to reduce the base rate by 0.25% to 5% today is a watershed moment. It marks the first reduction since March 2020. The Olympics should come around more reguarly. This will give new hope to borrowers across the UK that the worst is over and we are now on the path towards the new normal. Rates will not go back to their 2020 lows, but the release of the pressure valve will have enormous impacts on the lives of millions. Finally the Bank of England has made the right call.
Copy

Editor
Harps Garcha
Director at Brooklyns Financial
Just what the doctor ordered for the housing market, giving a much-needed boost to both first-time buyers and home movers. Even though the markets had already started to lower rates in anticipation of this move, the official cut has truly put a "spring in one's step." It injects fresh energy and optimism into the market, making mortgages more affordable and encouraging homebuyers to take the leap into buying or moving homes.
Copy

Editor
Jack Tutton
Director at SJ Mortgages
The predicted photo finish came true with a vote 5-4 in favour of a rate cut. This will inject some much-needed confidence into the mortgage and property market. This cut, the first since March 2020, should boost the market and lead to further reductions by lenders in the coming weeks. Mortgage holders or people looking to get onto the property ladder will be welcoming this news today, as they have been waiting a long time for this much needed positivity.
Copy

Editor
Simon Bridgland
Director at Charwin Private Clients
The floodgates should start to open as borrowers, who are already showing signs of high demand, will likely start flooding lenders' desks with applications. The drop in the base rate will help get the property market flowing once more. This cut will translate to a super £250 saving a year for a borrower with a £100,000 tracker rate mortgage. This will be a very welcome respite for both households and businesses across the nation.
Copy

Editor
Aaron Strutt
Product and Communications Director at Trinity Financial
This move will bring some much-needed good news to borrowers planning to get on the property ladder and people stuck on excessively high standard variable rates. It is not unreasonable to expect mortgage rates to come down as a result of this change particularly as the cost of funding has already reduced quite significantly. Hopefully, we will have more sub-4% fixed soon.
Copy

Editor
Dariusz Karpowicz
Director at Albion Financial Advice
Finally, a long-anticipated move. The Bank of England's rate cut to 5% is a small but crucial step in the right direction for the UK's mortgage and property markets. Lenders seemed to have seen this coming, with rate cuts already in motion. Let's hope this trend continues and the Bank of England makes another cut soon. This decision will certainly boost the market and provide much-needed relief for mortgage payers. Here's to a more vibrant property market ahead.
Copy

Editor
Chris Barry
Director at Thomas Legal
It is believed the classic pairing of wine and cheese can only be beaten by warm weather and a stronger than anticipated economy. The rate decision was close and wage inflation is still high, which indicates there are unlikely to be further cuts over the next couple of months. Although most banks had priced in a reduction, the confidence of this announcement alone will drive more demand into the market.
Copy

Premium
Kylie-Ann Gatecliffe
Director at KAG Financial
Finally - the news we have all been waiting for. Although we have seen many rate cuts from lenders over the last few weeks due to swap rates stabilising - this is the news many mortgage holders will have been hoping for. With months of holds - this finally shows that the market is heading in the right direction and stability is resuming. Many clients have worried about how their payments will look when their rates are up for renewal, this will hopefully be a trend to continue and allow those mortgage holders some relief when it comes to their monthly outgoings, which we know have been tight for many. In our eyes this is definitely the right move.
Copy

Graham Cox
Director at Bridging Hub
A base rate cut was long overdue and will provide a shot in the arm to a stagnating housing market. Frst-time buyers will be particularly pleased, as on average they pay 37% of their income on mortgage payments; historically it's been 30%. This will get people moving again, boost the economy and restore confidence. The worst is over.
Copy

Amit Patel
Adviser at Trinity Finance
Finally, the MPC have voted to cut base rate to 5%. This will bring a huge sigh of relief to borrowers up and down the country. This is a step in the right direction.

Copy

Ben Tadd
Director at Lucra Mortgages
Finally the news all mortgage borrowers have been waiting for has arrived. Don't expect big reductions in mortgage rates to happen overnight, as lenders will have already priced in an anticipated base rate drop to their pricing over the last few weeks leading up to today's announcement. Fixed rates should now however continue to fall further at a steady rate. A welcome confidence boost in the property market and an easing to the purse strings of many homeowners on variable rates as well as offering hope to those coming off fixed rate deals in the next 12 months.