Interest rates cut to 4.5% in positive move for property market

The Bank of England has cut interest rates from 4.75% to 4.5%, the lowest since June 2023.

Chancellor Rachel Reeves has welcomed the decision, saying the interest rate cut will “help to ease the cost of living pressures felt by families across the country and make it easier for businesses to borrow or grow”.

What does a lower interest rate mean for me?

For homeowners

• on a Fixed Mortgage there will be no changes to your interest rate or monthly payments. But it’s worth paying attention as around 1.8 million fixed-rate deals are due to end this year.
• on a Tracker Mortgage that tracks the base rate, you’ll see your rate and subsequent monthly payments will come down by £28.98 on average.
• on a Standard Variable Rate Mortgage, your rate and payments may come down but it will depend on each lender.

For those thinking about getting onto the property ladder

• the interest rate cut to 4.5% paints an optimistic picture for the year ahead and should provide a much-needed confidence boost.

Shawn Wood, Director and Head of Conveyancing at Watermans, says

“The new base interest rate is really welcomed news for both current and future homeowners. It gives people more confidence when buying and will certainly give the market a boost. Lower interest rates will likely lead to more competition from buyers so the best advice is not to hang about. If you’re looking to buy, go for it!”

Alistair Lee, Director of Property Sales, agrees saying

“This is a positive start to 2025. Almost all forecasts point to further cuts throughout the year, which will add to the positive sentiment felt today and continue to ease the transition for people looking to get on the property ladder.”