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To wait or not to wait, that is the question buyers and sellers will be asking ahead of next week's interest rate decision

ended 26. July 2024

Ahead of a possible cut to the base rate by the Bank of England next week, Newspage asked property and mortgage experts whether people considering making an offer should make their move before Thursday, or risk sellers holding out for better offers and house prices potentially rising — and how a base rate cut could impact mortgage pricing. 

In the words of Ken James, director at Contractor Mortgage Services: “To wait or not to wait, that is the question buyers and sellers will be asking ahead of next week's Bank of England rate decision.”

Chris Barry, director at property conveyancer, Thomas Legal, was more direct: “A quarter point reduction in August is now looking probable and, if this plays out as most expect, buyers will flock to the market like crows circling roadkill.”

Meanwhile, Mark Eaton, COO at April Mortgages, cautioned: “Forecasting interest rate changes on Threadneedle Street will generally be deeply speculative, with predictions all too often proving inaccurate. As such, buying a property and choosing the appropriate mortgage should be looked at through a long-term lens that will smooth out the risks of the short-term impact of monetary policy decisions. A base rate cut could be good for consumer confidence as it will be a sign that inflation is increasingly under control. However, it is unlikely to have a material impact on mortgage prices as future falls are generally already priced in.”

The views of 10 property and mortgage experts are below.

11 responses from the Newspage community

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Ken James
Director at Contractor Mortgage Services
To wait or not to wait, that is the question buyers and sellers will be asking ahead of next week's Bank of England rate decision. Even ahead of a potential base rate cut it's becoming a fast and furious ride, with mortgage rate changes rocking the market daily. While the odds of a base rate cut are improving, lenders have been cutting rates and creating their own mini- rate war without the base rate even shifting. We are seeing more activity and certainly more enthusiasm among people to go out and try to buy. Some will continue to hold back for a few months, others will be waiting for 80%-90% loan-to-value mortgages to go below 4%. If mortgages at lower higher LTVs go sub-4%, I suspect we are in for a mortgage feeding frenzy. Remember we are not looking to advise clients on the best time to buy, we are advising them on the best products available based on their criteria if they decide that this is the right time for them.
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Chris Barry
Director at Thomas Legal
A quarter point reduction in August is now looking probable and, if this plays out as most expect, buyers will flock to the market like crows circling roadkill. Increased activity levels will almost certainly mark the beginning of SSTC (sold subject to contract) prices starting to tick up once more. Buyers should try and get in quick to avoid added competition for available stock.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
At present, there is still more property for sale than active buyers making offers, so it will likely take more than the first base rate cut to tip the scales in favour of sellers. The first base rate reduction will build buyer confidence and bring more to the party, but it will be a few months before there is a material shift in supply and demand.
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Craig Fish
Director at Lodestone Mortgages
We have been warning our clients for a while now to be on the lookout for that first base rate cut, as it's likely to kickstart the market and instigate a significant increase in enquiries. This will likely see the current buyers' market transition to a sellers' market. To avoid disappointment, now is likely the perfect time to buy before we start to see asking prices increase and sellers hold out for better offers.
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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
My message has been the same all year, and that's do not procrastinate. Waiting for rate cuts to come may result in prices going up, which means what you save on your mortgage you may pay for in the property you buy. I recommend buyers tie up their purchases now and, if rates fall, they can secure a better rate nearer completion.
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Michelle Lawson
Director at Lawson Financial
The expected Bank Base rate cut on 1st August could be the switch that ignites the market. Resulting demand for property usually pushes prices up so if you are 'waiting to see what happens' this could be it, so be prepared. If you don't act and miss the window you will end up paying more for the same property as a buyer but will gain if you are a vendor.
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Ben Perks
Managing Director at Orchard Financial Advisers
People selling houses are definitely weighing up their options more recently. So buyers are being left to sweat it out. But if you’re a proceedable buyer with a sensible offer, hold your nerve and cross your fingers.
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Harps Garcha
Director at Brooklyns Financial
A rate reduction in August will certainly boost confidence in the property market, especially after a year of seeing the ‘can being kicked down the road’. But will it be enough to ignite the housing market straightaway? The more probable scenario is an increase in market activity in September, once schools are back. If this occurs, we can expect to see stock levels rise first, driven by those who have been waiting for rates to drop and are now ready to move forward with their plans. This scenario is even more probable if fixed rates continue their downward trend over the summer. Nevertheless, buyers should remain cautious, take their time in making offers and avoid rushing into decisions, as purchasing a home is a significant long-term commitment.
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Rohit Kohli
Director at The Mortgage Stop
If, based on current consensus, the Bank of England cuts rates by 25 basis points, house prices will likely rise due to the sheer number of people waiting and watching in the wings and stock levels already being in short supply. We have been consistent in saying to buyers that if they are ready to go then they should press ahead and avoid potential disappointment in the future if the market runs away from them, as it has a habit of doing.
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Justin Moy
Managing Director at EHF Mortgages
We are getting to that point in the market when almost anything could happen with property prices. As mortgage rates fall, demand from borrowers will inevitably increase, whipping up more of a frenzy within the property market, but that would also encourage more to sell, potentially flooding the market with those who have waited for better conditions, which may suppress house price growth. Whatever happens, estate agents will be the biggest winners from this change in market conditions.
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Mark Eaton
COO at April Mortgages
Forecasting interest rate changes on Threadneedle Street will generally be deeply speculative, with predictions all too often proving inaccurate. As such, buying a property and choosing the appropriate mortgage should be looked at through a long-term lens that will smooth out the risks of the short-term impact of monetary policy decisions. A base rate cut could be good for consumer confidence as it will be a sign that inflation is increasingly under control. However, it is unlikely to have a material impact on mortgage prices as future falls are generally already priced in.