The bank base rate has been cut by a quarter percent and is now at its lowest rate since June 2023. The bank says that if inflationary pressures continue to ease, it should be able to reduce interest rates further over time. It will be monitoring the British economy and global developments very closely and taking a gradual and careful approach to reducing rates further.
However, this latest cut is set to bring more confidence to an already strong market, with mortgage lenders offering cheaper loans and improving affordability for borrowers. The housing market continues to show resilience despite ongoing affordability pressures.
While there has been a modest improvement over the last year, it remains stretched by historic standards, says Nationwide. The lender says the price of a typical UK home rose by 4.1% year on year in January, showing a modest slowing in the annual pace of growth compared with December. Halifax says affordability is still a challenge for many would-be buyers, but the market’s resilience is noteworthy. There’s strong demand for new mortgages and growth in lending.
