Estate agency Chestertons has forecast a modest interest rate cut at the Bank of England’s next monetary policy announcement on 7 August amid signs that the UK economy is beginning to slow and housing market activity is gaining fresh momentum.
Matthew Thompson, head of sales at Chestertons, says that the agency expects the base rate to fall from 4.25% to 4%, echoing the view of many economists who anticipate the Bank will begin easing monetary policy after a prolonged period of high borrowing costs.
Chestertons reports a visible return of buyer confidence over the past month, supported by a rise in new property listings, which has broadened choice for prospective purchasers and added momentum to summer sales activity.
The anticipated rate reduction – though relatively modest at 0.25 percentage points – is likely to fuel further interest from buyers who have been waiting for a clearer signal on the direction of mortgage pricing.
LOST EXPECTATIONS
Thompson says: “Whilst this might not meet expectations of house hunters who have been hoping to see sub-4% rates this year, it will still encourage some buyers to go ahead with their property purchase.
“Lower interest rates, even if only reduced by 0.25 percentage points, will only boost buyer motivation over the coming months.”
