Breaking Property News 20/03/25
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Gareth Samples CEO of The Property Franchise Group gives analysis on interest rates
No change in the Bank of England base rate in March
The Bank of England held interest rates at 4.5%.
The nine-person Monetary Policy Committee, which sets the rate, voted 8-1 in favour of holding – with one member voting to cut.
That decisive vote is being seen by some as a sign that rates will remain at 4.5% for longer than expected. But – as with all economic forecasts – no-one can be certain.
The MPC said “global trade policy uncertainty has intensified” in recent weeks, citing US tariffs and other countries’ responses.
Yet while Bank of England Governor Andrew Bailey acknowledged that uncertainty, he also said: “We still think that interest rates are on a gradually declining path.”
Gareth Samples, CEO of The Property Franchise Group, comments: “The Bank of England’s decision to keep the base rate unchanged comes as no surprise, given the delicate balance between controlling inflation and supporting economic growth. While further rate cuts are anticipated later in the year, it’s clear that the Monetary Policy Committee is taking a measured approach.
“Encouragingly, we are seeing a steady recovery in market activity. Sales volumes have returned to pre-pandemic levels, mortgage approvals are on track with long-term trends, and first-time buyer numbers have rebounded significantly, spurred on by improving affordability and the impending stamp duty changes.
“Mortgage rates have also eased, with some competitive fixed-rate deals now available below 4% for those with a strong deposit. This is providing buyers with greater confidence to move forward with transactions, which in turn is supporting moderate house price growth.
“While external pressures such as geopolitical uncertainty and inflationary risks remain, the fundamentals of the housing market remain robust. Moderate GDP growth is still expected to underpin sustained sales activity, and with buyer confidence improving, we anticipate a stable and positive year for the property market in 2025.”
Iain McKenzie, CEO of The Guild of Property Professionals, comments: “As expected, the market will have to wait a little longer for the second bank rate cut of the year. The Bank of England continues to walk a fine line, balancing efforts to control inflation with the need to stimulate economic growth.
“While the consensus forecast suggests the base rate will be around 3.75% by year-end, the Monetary Policy Committee is in no rush to reach that level, instead opting for a slow and measured approach to further rate cuts.
“The good news is that following the bank rate cut to 4.5% in February, there has been an increase of lenders that have introduced more competitive mortgage rates. For borrowers with a significant deposit, some fixed rates have recently fallen below 4%.
“Although the economy faces certain challenges in 2025, particularly from geopolitical tensions and lingering inflationary pressures – moderate GDP growth is still expected to drive strong levels of sales market activity and modest price growth throughout the year.”
Andrew Stanton Executive Editor – moving property and proptech forward. PropTech-X
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