The Bank of England has just sprinkled some magic dust on the property market by cutting interest rates to a delightful 4.5%—the lowest since June 2023. This move has borrowers and buyers doing a little jig, as the cost of borrowing takes a favourable dip.
Jonathan Hopper from Garrington Property Finders is all smiles, noting that cheaper mortgages might finally coax those cautious buyers off the sidelines. But don't expect a house price rollercoaster just yet; the ample supply of homes is keeping inflation in check. Buyers are playing it cool, walking away from overpriced homes, even in prime spots.
Lucian Cook from Savills echoes a cautious optimism, suggesting that while the rate cut is a step in the right direction, it’s already baked into fixed-rate mortgage costs. However, as more cuts potentially loom, we might see more buyers flexing their financial muscles, leading to a gentle uptick in house prices and transactions.
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Simon Gammon from Knight Frank Finance advises patience, as mortgage rates might not drop immediately. But when they do, expect lenders to pounce, eager to recover from the economic slumber of the past two years.
Meanwhile, Nathan Emerson from Propertymark highlights the potential for new and improved mortgage products to hit the shelves, offering a much-needed boost in affordability and confidence.
So, while the Bank of England tempers its economic outlook, the property market is buzzing with anticipation. Could this be the nudge buyers need to dive back in? Only time will tell, but the scales are certainly tipping in their favour!
Want to hear more? Join Mal on the Property AI Report Podcast each week!
Access from your preferred podcast provider by clicking here
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