Property industry reaction as interest rate cut to 4.25%

The Bank of England has just made the decision to cut the base rate to 4.25%.

Following a hold in March, the rate has today been cut to 4.25%.
This comes as a result of inflation remaining relatively stable and decreasing to 2.6% (March 2025), despite being higher than the Bank of England target rate of 2.0%.
The decision to cut the base rate by the Monetary Policy Committee was the result of seven out of nine members voting in favour of reducing the rate.

A range of property indusrty experts have commented on this below with widespread approval of the news:

Bradley Post, MD of RIFT, commented:

“A second consecutive cut to the base rate already this year will come as welcome news if you’re a borrower, particularly for those households who are continuing to feel the pinch where the cost of living is concerned.

Of course, whilst it may mean that we’re paying less when it comes to our mortgages, or other finance agreements, it does mean that the interest accrued on our savings pots will weaken and this won’t be as warmly welcomed by those trying to form a nest egg.”

Stephanie Daley, Director of Partnerships at mortgage advisor Alexander Hall, commented:

“We’ve seen a consistently strong level of mortgage activity develop since interest rates stabilised and a second cut so far this year will only boost confidence in the market even further.

The good news for homebuyers and remortgagers is that lenders have already been reacting positively to this greater degree of mortgage market stability and over the last month we’ve seen rate drops across all loan to values on both residential fixed rates and BTL rates.

Not only have we seen sub 4% rate products become available again, but the number of low deposit mortgage products available are their highest in 17 years, which should help first-time buyers to climb the ladder sooner than expected.”

CEO of specialist lender Octane Capital, Jonathan Samuels, commented:

“Today’s rate cut was largely expected and we’ve already seen swap rates plummet in recent weeks in anticipation of the Bank of England’s announcement today.

This will come as welcome news and the general expectation is that today’s cut is first of several to come over the course of the year.

There are two primary reasons that interest rates are expected to be lowered further and both can be traced back to Trump Tariffs.

First, lower interest rates are desperately needed to stimulate the UK economy into growth territory. On 26th March the Office for Budget Responsibility (OBR) halved its UK GDP growth forecast to just 1% this year largely a result of global trade pressure from Trump’s Tariffs.

Second, Trump’s 145% tariffs on China make it very likely that cheap Chinese goods destined for the US are re-routed to other countries like the UK. This so-called dumping of cheap Chinese products will lower inflation which gives the Bank of England the much needed flexibility to lower interest rates.

If the good news is lower interest rates, the bad news is building costs are going up 17% over the next 5 years according to BCIS. However, so far this hasn’t been driven by material cost increases as in previous years, rather labour costs going up as the National Living Wage and National Insurance (Employer NICs) take effect.”