Bank of England Reduces Base Rate to 5%
In a move that will bring joy and relief to Britain’s homeowners, the Bank of England has today reduced the base rate to 5%.
After much speculation, the Bank of England’s decision, which could be seen as bold, suggests that the hardest yards may now be behind us. This reduction in the base rate is expected to gradually lower borrowing costs to more agreeable levels.
How Will This Impact Our Clients?
We have often said that confidence is the lifeblood of the housing market. With political uncertainties largely resolved and interest rates trending downward, we are optimistic that confidence will return. While this doesn’t necessarily mean that house prices will rise, we do expect an increase in the number of properties available, which is positive news for our clients.
At PLG, we completed more purchases in the first half of this year than in the entirety of 2023, both in terms of number and value. This trend indicates a shift towards a buyer’s market. Additionally, we have been closing deals at an average of 96.4% of the asking price, reinforcing this shift.
The last few years have been challenging, particularly due to a lack of available properties. We hope this rate cut marks a turning point for those who want or need to move to a new home.
Looking Ahead
As people adjust to more typical interest rates, rather than the exceptionally low rates of the past 15 years, we anticipate that any increases in house prices will be moderate. Furthermore, as interest rates decrease gradually, we expect more attractive mortgage rates to become available.
We believe these factors will help stabilise the housing market and boost confidence. This stability can only be beneficial for our clients and the teams supporting them in finding their forever home.
PLG Consultants
1st August 2024
