The Bank of England is expected to hold the base interest rate at 4.25% this week, a decision many in the property world are watching closely.
This follows a narrow vote in favour of a cut last month, when the base rate dropped from 4.5% to 4.25%. It gave a much-needed boost to buyer confidence and helped bring momentum back to the market. But will we see further cuts this summer?
A More Cautious Approach
Earlier in the year, several rate cuts were predicted. But global uncertainty, including rising inflation and wider economic pressures, has made the Bank take a more cautious stance.
Inflation rose to 3.5% in April (its highest level in over a year), driven by hikes in household energy bills, council tax, airfares and services. This complicates the Bank’s decision-making, as lowering interest rates too quickly could risk fuelling inflation even further.
Bank of England Governor Andrew Bailey recently commented:
“I think the path [for interest rates] remains downwards, but how far and how quickly is now shrouded in a lot more uncertainty.”
What Does It Mean for the Property Market?
If you’re buying or selling a home this year, interest rates directly impact mortgage affordability, and in turn, buyer demand and pricing confidence.
While Thursday’s announcement might not bring another cut, most experts still expect further reductions later this year. That means there could be a window of opportunity for buyers to lock in more competitive mortgage deals sooner rather than later.
Is Now the Time to Secure a Better Rate?
Many lenders are already adjusting their rates in anticipation of future cuts. If you’re curious whether you could save money or boost your borrowing power, speaking to an advisor could be a smart move.
Want to know what’s possible based on your circumstances?
Click here to book a free call with our mortgage advisor and we’ll help you explore your best options.
Article by Andrew Overman | Partner | Location Location East
