“Bank of England Cuts Interest Rates for Second Time This Year as Anticipated”
Posted on Thursday, 7 November, 2024
The Bank of England has reduced interest rates for the second time this year, bringing them down to 4.75% as anticipated.
Previously set at 5% following a 0.25% reduction in August (the first since 2020), rates were held steady in September. Bank of England Governor Andrew Bailey reassured the public, noting that rates are “likely to continue to fall gradually from here.” However, the Bank’s latest quarterly forecast suggests that the recent Budget may have added slight inflationary pressures, which could slow the pace of future rate cuts. Bailey emphasized the need to ensure inflation remains close to target, cautioning against overly rapid or significant cuts.
Industry Reactions:
Iain McKenzie, CEO of The Guild of Property Professionals, expressed optimism: “Today’s rate cut offers a welcome boost for the property market, though the long-term effects of the Budget on interest rates are still uncertain. While mortgage rates have generally trended lower, some lenders recently raised rates. Today’s decision may encourage more competitive offerings from lenders.”
Matt Thompson, head of sales at Chestertons, added: “With inflation below 2%, today’s rate cut was expected. It’s good news for house hunters who now have more motivation to continue their search, likely leading to increased market activity.”
Jeremy Leaf, a north London estate agent, commented: “Economic prospects, especially interest rate trends, have the most impact on buying decisions. Today’s reduction should motivate undecided buyers, as recent positive housing data adds to buyer confidence.”
Nathan Emerson, CEO of Propertymark, remarked that today’s news is reassuring for buyers, especially those who may have postponed plans due to affordability concerns. He cited the Bank’s latest Money and Credit Report showing a rise in mortgage lending, suggesting a robust winter for the market.
Nicky Stevenson, managing director of Fine & Country, observed: “Market conditions are looking favorable as today’s rate cut will further boost confidence. Mortgage approvals rose for the fourth consecutive month in September, reflecting steady buyer interest.”
Richard Donnell, executive director at Zoopla, noted that the base rate cut is supporting strong sales growth, with mortgage rates now at a two-year low. He expects lower borrowing costs to sustain demand and sales into 2025.
Nick Leeming, chairman of Jackson-Stops, welcomed the second rate cut, saying: “Though small, this reduction signals Bank of England confidence and reassures buyers. The Bank’s long-term view reflects anticipated economic improvements, and economists predict a quarterly pace of rate cuts next year, bolstering buyer confidence. However, the persistent housing stock shortage remains a challenge.”
Amy Reynolds, head of sales at Antony Roberts, commented: “The August rate cut increased buyer activity, and further cuts could encourage more sales, especially as market uncertainty has eased post-Budget. First-time buyers, however, should act soon to avoid potential costs related to upcoming stamp duty changes.”
Guy Gittins, CEO of Foxtons, added: “While there was no stamp duty relief extension in the recent Budget, today’s rate cut should uplift buyer sentiment. The UK property market is recovering, driven by stabilized lending, and we expect a surge in buyer interest as many aim to complete purchases before the 1st April deadline.”
