On 1 August, the Monetary Policy Committee (MPC) of the Bank of England announced a cut in the base interest rates in the UK from 5.25% to 5%.

It’s a small cut and the first one since the start of the pandemic four years ago, but it is significant, particularly for the moving industry.

Andrew Bailey, the governor of the Bank of England, made it clear that he was taking a cautious approach not wishing to risk inflation rising again by cutting rates by too much too quickly.  However, the cut is a signal of intent and is likely to have a positive effect on house moves as the cost of mortgages begins to fall in the coming months and purchasers increase in confidence.

Stephanie Daley, Director of Partnerships at mortgage broker Alexander Hall commented: "The Bank of England's decision to cut offers a significant opportunity for homeowners and home buyers. While mortgage rates may not drop immediately, this change should help release pent-up demand in the market, restoring confidence among buyers and those looking to move house who had delayed plans due to higher rates. Over the past three years, many clients opted for longer mortgage terms, especially home movers and those remortgaging. The drop in base rate should ease affordability concerns, making longer-term lending, now available up to 40 years, more feasible and appealing."

It remains to be seen by how much and how quickly mortgage lenders respond.

Photo:  Andrew Bailey, Governor of the Bank of England and Chair of the Monetary Policy Committee.