Interest rate cut: agents prepare for busy Autumn

Estate agents are braced for a busy Autumn selling season after the first interest rate cut since March 2020.

The Bank of England reduced the base rate from 5.25% to 5%, which estate agents hope will bring down mortgage pricing and boost buyer demand.

Emily Williams, director of research at Savills, said: “The base rate cut will give buyers increasing confidence that mortgage rates are on course to return to more affordable levels, gradually improving the range of buyers in the market and their buying power.

“We expect this to feed through into more market activity in the autumn, particularly if there are further cuts to the base rates in the coming months.”

She said capacity for house price growth will remain limited until there is a more significant reduction in the cost of debt though, adding: “This is a clear signal to the market that the Bank feels it has turned a corner in the battle against inflation, and it should give most buyers and sellers confidence that the market will improve as we head into 2025.”

Tom Bill, head of UK residential research at Knight Frank, added: “The wait for the first rate cut since March 2020 and the hullabaloo of a general election was not a conducive combination for homebuyers this summer, many of whom switched off early for the holiday period.

"Now there has been a cut, demand and transaction activity will increase when the autumn market gets underway in September and more mortgage rates fall below the 4% psychological threshold.”

Nathan Emerson, chief executive of Propertymark, added: “The rate cut it is excellent news for the housing market and no doubt a huge sigh of relief for those who have felt the pain of higher interest rates for the last two years.

“Summer is traditionally a busy time of the year for the housing market, and the base rate cut should hopefully provide a new wave of confidence and affordability for many. With a new government in power that is committed to delivering near two million new homes Propertymark hopes the news is a real turning point for homeowners and those who aspire to buy.” 

But Tim Bannister, Rightmove’s property expert isn’t expecting a rush of activity as mortgage rates are still high and won’t drop significantly in the short term, adding: “It is likely to have a positive impact on home-mover sentiment which bodes well for the Autumn selling season.”