Breaking Property News 06/02/25

Daily bite-sized proptech and property news in partnership with Proptech-X.

 

Bank of England cuts base rate by 0.25%

Gareth Samples, CEO of The Property Franchise Group,  comments: “Today’s decision to cut the rate will be welcomed news for both mortgaged homeowners, as well as mortgage-dependent buyers who are looking to get their foot on the ladder.

‘While inflation remains elevated above the target, the Bank of England is focused on the long term and stimulating economic growth. Economic growth is expected to be slightly stronger over 2025 than it was in 2024. An improved economic outlook, coupled with falling interest rates will help improve sentiment in the market and should stimulate activity to some degree.

“Further interest rate falls are expected in 2025, which should result in improved affordability, enticing a broader range of potential buyers. A greater range of active buyers should help drive the modest uplift in prices that is anticipated this year.”

Commenting on today’s BoE interest rate drop providing some relief for borrowers, Daniel Austin, CEO and co-founder at ASK Partners, said: “The Bank of England’s decision to lower interest rates to 4.5% marks a pivotal moment for the UK real estate market. While this move may provide some relief for borrowers, the broader impact will depend on how quickly lenders adjust mortgage rates and how sustained the rate-cutting cycle becomes.

For homeowners and prospective buyers, lower rates should, in theory, make mortgages more affordable. However, the current market dynamics, where fixed mortgage rates have remained elevated despite previous signs of easing, suggest that any immediate impact may be muted. That said, a more stable rate environment could help restore buyer confidence, particularly among those who had been waiting for clarity before entering the market.

“For investors and developers, the trajectory of rate cuts will be crucial. With inflation now closer to the Bank’s 2% target, there is renewed optimism that financing conditions will improve, unlocking capital for new developments. Demand remains strong, particularly in sectors like co-living and build-to-rent, where supply constraints continue to drive investor interest.

As we approach a potential shift in government policy and economic strategy, real estate stakeholders should remain agile. If rates continue to fall towards 3.5% by year-end, as some predict, this could fuel a more sustained recovery in transaction volumes and investment flows. However, uncertainty remains, and prudent financial planning will be key as the market navigates this transition.”

Iain McKenzie, CEO of The Guild of Property Professionals comments: “While inflation is still stubbornly sitting above the target, it was not enough to keep the Bank of England from cutting the rate. Today’s decision, as well as further rate cuts expected throughout 2025 should help to improve affordability, which in turn will attract a broader range of buyers to the market.

“Rates are forecast to drop to around 3.75% by the end of the year. Although much of this has already been priced into fixed mortgages, there could be some further downward shifts in these rates. This would be welcomed by those looking to move or those who will be remortgaging this year.

“While changes to Stamp Duty thresholds will have an impact on the market, it is expected that we will see a modest improvement for both the economy and the housing market in 2025. The economic backdrop has set the stage for steady market activity and moderate price growth throughout.”

 

Andrew Stanton Executive Editor – moving property and proptech forward. PropTech-X

Andrew Stanton

CEO & Founder Proptech-PR. Proptech Real Estate Influencer, Executive Editor of Estate Agent Networking. Leading PR consultancy in Proptech & Real Estate.

You May Also Enjoy

small house bird box
Breaking News

UK First Time Buyers better off than many other global nations

Is it really that bad being a first-time buyer? UK better off than many other global nations when it comes to affordability The latest market analysis from Yopa, the full-service estate agents, reveals that first-time buyers (FTBs) in the UK may be paying 63% more to get a foot on the property ladder than they…
Read More
new build homes colchester essex
Breaking News

Building Safety Regulator Reform

The Government has announced reforms to the Building Safety Regulator, including leadership, process and investment. The changes are hoped to deliver 1.5 million homes. The reforms pave the way for creation of a single construction safety regulator, as recommended by the Grenfell Tower enquiry. David Smith, property litigation partner at London law firm Spector Constant…
Read More
Breaking News

New anti-money laundering rules now in effect: what landlords need to know

New anti-money laundering (AML) rules came into effect this month, marking a significant change for landlords and the lettings industry as a whole. The new rules mean financial sanctions checks are now required for all lettings, regardless of how much rent is charged. Here, Steve Bond, managing director of residential lettings for Beresfords, explains what…
Read More
Breaking News

What landlords need to know about the upcoming Renters Rights Bill

The government’s long-awaited Renters Rights Bill is one of the most significant overhauls of the private rental sector in decades. While it has not yet received royal assent, the legislation is expected to come into effect late this year, or early in 2026. With the bill moving closer to becoming law, Steven Bond, managing director…
Read More
Breaking News

Mortgage approvals bounce back in May

The latest figures show that: – Mortgage approvals on house purchases for May sat at 63,032 up 3.9% from 60,656 in April. The monthly increase seen in May marks the end of four months of previous decline, with approval levels having fallen each month since January of this year. Approvals are also 2.5% higher than…
Read More
Breaking News

Money and Credit – May 2025

Key points: Net borrowing of mortgage debt by individuals increased by £2.8 billion to £2.1 billion in May, following a large decrease in net borrowing of £13.8 billion to -£0.8 billion in April. Net mortgage approvals for house purchases increased by 2,400 to 63,000 in May. Approvals for remortgaging also increased by 6,200 to 41,500…
Read More