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Property industry reaction as interest rates cut

Katie Court
Authored by Katie Court
Posted: Thursday, August 1, 2024 - 12:39

The Bank of England has just made the decision to reduce the base rate to 5.00% today.

  • The base rate has been cut to 5.00%, with this being the first cut since March 2020.
  • The cut comes as a result of wider economic stability and inflation holding at 2% for the last two months.

 

Guy Gittins, Foxtons Chief Executive Officer, said:

"Today's base rate reduction will come as a welcome surprise for the nation's homebuyers and one that will only add to the property market momentum that has been building so far in 2024.

We've already seen monthly mortgage approvals sitting at consistently high levels as pent-up demand across the market has been released and, in recent weeks, mortgage rates have continued to trend downwards, with several five year fixed term mortgages available with rates below four percent.

With interest rates now starting to fall, we only expect that these positive property market trends will intensify."

 

Jason Ferrando, CEO of easyMoney says:

"Mortgage market activity has been building steadily so far this year and while today's cut may be marginal, we can expect it to act as a shot in the arm for the sector and one that will spur more buyers to get off the fence and get on with their plans to purchase.

What's more, today's cut is likely to be the tip of the iceberg and we could well see another before the year is out, which will only help to fuel market momentum further."

 

CEO of Octane Capital, Jonathan Samuels, commented:

"We've seen a far more settled landscape materialise since the base rate was held at the back end of last year and this stability has been key to the slow but steady recovery of the property market in 2024.

However, today's somewhat surprising decision to cut rates for the first time since March 2020 is likely to stoke the furnaces with respect to buyer demand levels and accelerate this recovery at a greater pace than expected.

We've already started to see swap rates reduce in recent weeks, which suggest that mortgage rates are soon to follow, but it's likely that many lenders will now act sooner rather than later which will help ease the cost of borrowing for the nation's homebuyers."