BoE base rate cut met with relief by mortgage industry

August 10, 2024 by Brendan O'Neill

Rates

The decision by the Bank of England (BoE) to cut the base rate has been greeted warmly those working within the property and mortgage sectors, from lenders to mortgage advisors.

This rate has been set at 5.25% for the past 12 months, which represents its highest level for more than a decade and a half. Now the BoE has finally delivered the long awaited reduction though, bringing it down to 5%. The general reaction to that move among industry figures has been a positive one, with the feeling being that it will help both existing borrowers and those hoping to buy.

The distribution and sales head at Bluestone Mortgages, Mark Hollands, said to Mortgage Strategy that:

“Would-be and current borrowers across the country will no doubt be letting out a huge sigh of relief following today’s much anticipated decision, as rates fall from their historic 16-year high.”

Hollands then went on by saying that he expected the number of buyers entering the market to increase in the wake of this news, because it will give potential buyers more confidence that they can afford mortgage rates.

This viewpoint was seconded by Paul Broadhead from the Building Societies Association, who said the reduction represented a turning point. However, the continuing issue of housing affordability was raised by Mark Harris of SPF Private Clients. He said that a lot of new homes need to be built quickly.

This is something anyone with CeMAP training will recognise the truth of, but this is a positive move.