The property and mortgage sectors are holding their breath ahead of the Bank of England (BoE) latest interest rate decision. While rates are expected to be cut to the base rate by 0.25%, industry insiders are sharing their views on how this move could shake up the pack with opportunities and what this could mean. So, without further ado, let’s look at what three leading lights in the field have had to say, and consider what it means for the UK property market in 2025.
The Catalyst for a Roaring Market
CHL Mortgages’ Commercial Director, Ross Turrell, sees the anticipated rate cut as a major boost for the UK property market. He notes that the BoE’s base rate has a tangible impact on the property market, adding:
“The past few years have demonstrated without a doubt that Threadneedle Street’s base rate is what matters most to the property market, so today’s decision — although widely anticipated — will be welcomed by the UK property sector.”
Turell expects this rate cut will be a catalyst for what is already shaping up to be a robust market in 2025. He cites increasing buyer demand and uptick in transaction levels as reasons any easing of borrowing costs would serve to support momentum.
Main Takeaways From the Turrell Analysis:
- The rate cut is likely to spur on an already busy property market
- We are seeing increased buyer demand and more transactions
- Additional cuts in interest in rates are expected through the year
- It’s a sign that the market is moving towards a more stable and “normal” investment landscape
Getting Ready for Increased Market Activity
Coupled with planned stamp duty reforms, Turrell warns that February and March could be a particularly busy time. He advises:
“It is thus crucial for lenders and brokers to get ready for increased market activity, making sure their clients are in the best position to take advantage of the opportunities a lower rate creates.”
This activity will require guides for the demand increase and a fast-paced setting in handling clients.
In a Rising Rate Environment, Service is Key
Darrell Walker, Director of Sales & Distribution at ModaMortgages focuses on the bigger picture of rate moves and the importance of service in the lending space. Although Walker recognizes that a rate cut can have a stimulative impact, they highlight the potential uncertainty regarding future rate adjustments:
“Any move to cut the base rate will incentivise the market, giving some borrowers a boost. But if today’s news was unsurprising, the broader question is where the base rate goes over the next 12 months, and this, as always, is far from certain.”
Walker’s Focus on Service:
- There rates will dominate conversations between buyers and brokers
- Lenders’ seamless service delivery is clearly of paramount importance
- Key service components: simple applications, quick decisions, and candid conversations
- Brokers and clients can proceed with speed and confidence, thanks to service quality
Global Investment Opportunities
Below, Tim Parkes CEO RAW Capital Partners gives his view of how the interest rate cut may impact international property investors. He adds, from that point lender rates had been falling throughout January and market activity had picked up as the potential for a cut had been discounted in the market.
Parkes notes one interesting possible consequence for overseas investors:
“The direction of GBP, in the wake of the BoE meeting, is particularly relevant for international property investors. Pound value generally falls after interest rate cuts, which could provide opportunities for investors holding other currencies for relative discounted UK property. ”
Key Insights from Parkes:
- Most of the rate cut was already priced in.
- The lender rates have continued to decline in prediction
- The weaker pound might draw more foreign investment
- Investors and brokers find themselves in a red-hot market, and speed will be of the essence
Market Outlook and Anticipations
As we peer into the future, various things will probably affect the property market in the aftermath of the BoE’s (Bank of England) decision:
- Continued Momentum: `The rate cut is likely to sustain and possibly accelerate the market momentum, with higher buying demand and transaction levels.
- International Interest: The UK property market could benefit from a weakening pound leading to more inquiries from overseas investors keen to take advantage of relative discounts.
- Breadth and Depth of Competition: Lenders who are able to rise above competitors should be able to offer quicker decisions and easier processes.
- Short-Term Surge: Combination of rate cut with imminent stamp duty reforms means particularly busy short period coming up, February / March
- Focus On Missions More Than Rates: Overall expectations are more positive, but even experts are cautious when predicting future interest rates, suggesting an adaptive approach based on future developments.
Conclusion
The expected BoE (Bank of England) rate cut would be a big milestone for the UK property market in 2025. It is opening avenues for homebuyers, foreign investors and the industry professionals as well. But, as our experts have emphasized, success in the new reality will entail readiness, doing business efficiently and being ready to act quickly on new opportunities that arise.
With the market adjusting to these moves, the key area of focus will be the Bank of England’s current guidance on rate direction and the likely impact that this will have on what is set to be an eventful year for UK property.
