The Bank of England cut interest rates today, providing some relief for borrowers ahead of Christmas.
The decision to bring the the cost of borrowing down to its lowest level in nearly three years was announced at midday by the Bank of England’s Monetary Policy Committee.
The Bank has reduced the base rate from 4% to 3.75%. But while a cut was widely expected today, policymakers did not vote unanimously.
Industry response:
Paul Hardy, managing director at LSL Estate Agency Franchising: “Today’s cut to 3.75% is a welcome boost after the slowdown leading up to the Budget. Dropping below 4% is psychologically significant for buyers and sellers, restoring confidence after a cautious few months. While it won’t transform conditions overnight, it signals improving stability, and we expect lenders to respond with sharper products, setting the stage for renewed market activity heading into 2026.”
Simon Capp, head of residential sales at British Land: “Today’s rate cut is a positive end to the year for the residential market, which has faced headwinds throughout 2025 due to heavy Budget speculation and slower than expected reduction in rates. The timing of this cut is helpful, as January is typically a busy period driven by ‘new year resolution’ activity, with many buyers looking to progress a purchase or sale, so the move to 3.75% should lift buyer sentiment and support mortgage affordability as we head into the new year.”
Lucian Cook, head of residential research at Savills: “Today’s cut to the Bank of England base rate will open up additional headroom in the housing market, helping to rebuild momentum after a stop-start year. However, it does feel as if this long-awaited rate cut is already “baked-in” to fixed-term rates, and an underlying sense of caution among buyers will override any potential stimulus to house prices in the short term.
“Looking ahead to 2026, we expect house price growth to remain in low single-digit territory, despite improving affordability. While interest rates are expected to continue to edge down, weak economic growth is likely to act as a drag on buyer confidence, with a weak labour market limiting the capacity for growth.
“Our mainstream house price forecast expects average house prices to increase by 2% in 2026 or £7,200, in what is expected to be a bottom-up rather than a top-down recovery.
“Typically, the prime market leads a rebound, but the opposite is true in the current environment as it will take some time for the top-end of the market to fully absorb tax changes, with moderate falls expected to continue in the New Year.”
Read the orginal article: https://propertyindustryeye.com/breaking-property-industry-reacts-to-bank-of-englands-interest-rate-decision/?utm_source=rss&utm_medium=rss&utm_campaign=breaking-property-industry-reacts-to-bank-of-englands-interest-rate-decision
