Property Industry Response to Latest Bank of England Rate Cut
Following a hold in June, the rate has today been cut to 4.0%.
This comes despite inflation (CPI) sitting at 3.6% in June 2025, higher than the Bank of England target rate of 2.0%.
The decision to reduce the base rate by the Monetary Policy Committee was the result of five members voting for a cut to 4.0%, with four members voting to hold at 4.25%.
Here are some thoughts from the Industry.
Nathan Emerson, CEO of Propertymark:
“Throughout the world, many central banks have faced considerable pressure to reduce interest rates, and the UK has been no exception. So, this news is extremely positive and remains consistent with what has been widely hoped for.
“While this news will be very welcome for many buyers and sellers who may be empowered to potentially borrow more to finance their next house move, inflation is still above the Bank of England’s target rate of 2%.”
Simon Dawson, Chief Revenue Officer, at Outra:
“The Bank of England’s base rate remains a central force shaping the UK housing market. Historically, lower interest rates have reduced borrowing costs, encouraged home buying, and supported house price growth. However, this relationship is never purely mechanical; it is influenced by a broader mix of factors, including employment trends, consumer confidence, and developments in the global financial landscape.
“With the Bank of England today deciding on a 25-basis point cut, market conditions appear set to support the current mild house price growth observed across several leading indices. Yet even with this reduction, it’s unlikely to trigger a significant upswing in housing market activity. Instead, a more stable and measured trajectory is expected to continue, barring any major economic shocks.
“While national trends offer valuable insight, real estate professionals and investors alike should be cautious not to overlook regional nuances. Localised supply-demand dynamics, economic resilience, and demographic shifts mean that markets can behave very differently across the country. At Outra, our data has identified several interesting movements in local housing markets over recent quarters, trends that may point to emerging opportunities or early signals of change”.
Stephanie Daley, Director of Partnerships at mortgage advisor Alexander Hall:
“We’ve already seen significant strength return to the mortgage sector since interest rates began to stabilise and trend downwards. Today’s decision to further reduce the base rate will only serve to fuel this momentum, easing the cost of borrowing for the nation’s homebuyers even further.
This welcome boost comes in addition to the recent decision to make the Mortgage Guarantee Scheme permanent, alongside the loosening of income lending restrictions, both of which have already had a positive impact on mortgage affordability.
As we move into the second half of the year, this positive shift in the mortgage landscape is expected to support sustained demand and contribute to the long-term resilience of the market.”
CEO of Foxtons, Guy Gittins:
“Today’s decision to cut the base rate is a welcome development for the property market and one that should continue to support year on year growth, as we saw in the first half of 2025.
This interest rate reduction, along with improving mortgage affordability and changing lending criteria from the new mortgage guarantee scheme, all provide further reassurance and stability for buyers and investors.
As we move into the second half of the year, our outlook remains cautiously positive given the continued appetite for vendors to bring great property to the market, while taking into consideration wider macro-economic factors.”
Jonathan Samuels, CEO of Octane Capital:
“The Bank of England’s decision to cut the base rate today is a welcomed move, offering a much-needed boost to the property market and building on the momentum seen over the last 12 months.
While inflation remains a concern, we’ve already seen many lenders acting in anticipation of today’s cut and the resulting reduction in borrowing costs will provide immediate relief, not just to the nation’s homebuyers, but also to those within the industry looking to utilise specialist lending products.
A rate cut will further encourage developers to push forward with projects and bring much needed housing stock to the market and specialist lending plays a crucial role here, by offering flexible and accessible financing,
As we move into the second half of the year, the combination of lower borrowing costs and the support from specialist lenders will be key in driving continued growth in the property sector.”
Thomas Cantor, Co-Head of Short-Term Finance at West One Loans:
“While the Bank of England’s decision to cut the base rate today is a positive move for the property market, it’s important to note that this move has already been largely priced in by lenders.
The expectation of a rate cut has been building for some time, however, it will continue to support market confidence and allow developers to move forward with critical housing projects.
Specialist finance will continue to play a key role in ensuring projects are funded and completed, contributing to the ongoing stability and growth of the property sector.”
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