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United States Director of Fine & Country comments of Bank of England base rate ...
The Bank of England has reduced interest rates from 5.25% to 5%, marking the first decrease since the start of the pandemic in March 2020.
The cut comes as a result of wider economic stability and inflation holding at 2% for the last two months. In response to the Bank of England’s announcement on interest rates, Nathan Emerson, CEO of Propertymark, commented:
“Today’s rate cut it is excellent news for the housing market and no doubt a huge sigh of relief for those who have felt the pain of higher interest rates for the last two years. Summer is traditionally a busy time of the year for the housing market, and today’s base rate cut should hopefully provide a new wave of confidence and affordability for many.
With a new government in power that is committed to delivering near two million new homes Propertymark hopes today news is a real turning point for homeowners and those who aspire to buy.”
Iain McKenzie, CEO of The Guild of Property Professionals, comments: “Competing signals on consecutive days perfectly portray the housing market’s current confused mood – transactions falling one day, and prices up the next.
“While it’s goo news to see that annual growth is up to 2.1%, it’s important to remember that prices remain 2.8% below the peak levels seen in summer 2022.
“All eyes are now on the Bank of England, which has the power to change the way the wind is blowing once again as it decides on interest rates at lunchtime.
“While mortgage approvals have stabilised around 60,000 per month, this is still about 10% below pre-pandemic levels, showing restrained demand. Economic uncertainty may also be causing some potential buyers to be cautious about entering the market.
“I expect house prices to see modest growth over the next few months, with any interest rate cut likely to give the numbers a boost, but the impact would likely be gradual rather than immediate.
“The Bank of England’s decision today will be particularly significant in shaping the near-term outlook for the housing market.
Nicky Stevenson, Managing Director of Fine & Country “July’s house price rise could mark a turning point for the property market and if interest rates drop today, optimists will be expecting a property boom in the latter half of 2024.
“This marks the fastest pace of growth since December 2022 and suggests renewed confidence in the housing sector and hopefully the start of a more stable period.
“It comes at a time when the broader economic picture is improving. Inflation has been held steady at the Bank of England’s target rate of 2%, meaning that measures taken to control rising prices are working.
“A rate cut by the Bank of England could be a potential game-changer for the property market. Lower interest rates typically translate into more affordable mortgages and we’re already seeing lenders respond with more competitive deals ahead of the decision later today.
“With the combination of rising house prices, stabilised inflation, and potentially lower interest rates, this could lead to a flurry of activity in the coming months – with more properties coming to market and a potential boost in transactions.
“But while these factors may fuel increased activity, the full effects will take time to unfold. Increased housing supply and ongoing affordability pressures will act as a counterbalance, and help to ensure that any market growth remains sustainable.”
