Bank of England Cuts Interest Rates

Interest Rates Cut

The Bank of England’s decision yesterday, on Thursday 18th December, to cut the base interest rate marks a welcome shift in the economic landscape and brings renewed optimism to the UK property market. After a prolonged period of elevated borrowing costs, this interest rates cut signals a move toward greater affordability and stability, benefitting both buyers and sellers alike.

With inflation easing and economic pressures beginning to soften, the rate cut is designed to stimulate activity and restore confidence. For the housing market, the implications are encouraging.

 

Improved Affordability for Buyers

One of the most immediate effects of a lower base rate is a reduction in the cost of borrowing. For buyers on tracker or variable-rate mortgages, the impact may be felt straight away through lower monthly repayments. For those looking to purchase, this change improves affordability and borrowing capacity, helping buyers feel more comfortable committing to a move.

In practical terms, buyers may benefit from:

  • Lower monthly mortgage repayments on tracker and variable-rate products
  • Improved borrowing power, enabling access to a wider range of properties
  • More competitive mortgage deals as lenders respond to reduced funding costs
  • Increased confidence to proceed with purchases that may have been delayed

 

Renewed Confidence and Demand in the Market

Beyond the direct financial impact, interest rate cuts play a significant role amongst confidence. When borrowing becomes cheaper, assurance tends to return. Buyers who had been cautious or waiting on the sidelines are often encouraged to re-enter the market, leading to increased levels of enquiry, viewings and offers.

This uplift in buyer confidence can translate into healthier transaction levels and a more balanced market overall.

 

A More Supportive Environment for Sellers

While lower interest rates are often discussed from a buyer’s perspective, sellers stand to benefit just as much. Increased affordability expands the pool of potential purchasers, meaning more motivated and financially capable buyers actively searching for homes.

For sellers, this can result in:

  • A larger and more engaged buyer audience
  • Increased viewing activity and stronger levels of interest
  • Faster sales as buyers feel more confident making decisions
  • Greater price stability, particularly in well-priced and well-presented homes

 

Looking Ahead with Optimism 

Today’s rate cut represents more than just a short-term adjustment, it is a signal that conditions are moving in a more favourable direction. While future rate decisions will depend on economic data and inflation trends, this change provides a strong foundation for a more active and confident property market heading into the new year.

However, while the outlook for the property market is increasingly optimistic, challenges remain within traditional sales methods. Lengthy transaction times, uncertainty, and the risk of fall-throughs continue to cause frustration for both buyers and sellers. As a result, many are seeking a more secure, transparent way to move home with confidence.

This is where Connect RealTime® provides a compelling alternative. For buyers, the process is designed to be mortgage-friendly, with the ability to secure a property using as little as a 5% deposit and a 95% mortgage*, alongside clear 60 or 90-day completion timelines. For sellers, Connect RealTime® offers a faster and more predictable route to sale, with guaranteed 30, 60 or 90-day completion options, fixed completion dates, and full transparency from day one – helping achieve the best possible price without the delays and uncertainty often associated with the open market.

Learn more about Connect RealTime®

 

*All mortgages are subject to borrower status and lender criteria. A broker fee may be payable upon mortgage application. The total fee payable will depend on your circumstances. Your mortgage consultant will explain any fees applicable in your initial consultation. Your home may be repossessed if you do not keep up repayments on your mortgage. Most buy to let mortgages are not regulated.