As highly expected, the Bank of England announced a further interest rate cut on 8 May 2025. Following a series of decreases since last year’s high of 5.25%, the rate has reduced to 4.25%, down from 4.5%.
The announcement has been welcomed by prospective homebuyers and current owners with fixed rate mortgage deals due to end, with the rate decrease helping to drive lower mortgage rates.
Chancellor Rachel Reeves emphasised the impact of the recent interest rate cuts:
“This interest rate cut is welcome news, and the fourth since we came into government making it cheaper for businesses to borrow, reducing the cost of a new mortgage, making homeownership more accessible, car finance more affordable and easing the pressure on those paying off personal loans.”
The Guardian revealed that the reduction will result in lower borrowing costs for 590,000 homeowners who are currently on a base-rate tracker mortgage.
Buying and selling at the same time?
Here are 10 things that could go wrong, and often do go wrong, and what, if anything, you can do to avoid them.
Buying and selling at the same time?
Here are 10 things that could go wrong, and often do go wrong, and what, if anything, you can do to avoid them.
With around 1.6 million fixed rate mortgages due to end in 2025, many of those looking to remortgage in coming months will still face significant mortgage payment increases. However, the latest rate cut means that it is a brighter scenario than 12 months ago.
There has been a flurry of lenders moving quickly to cut the cost of new fixed rate deals in recent weeks. Nationwide is amongst the lenders now offering sub-4% mortgage rates, as the mortgage price-war heats up.
The next Monetary Policy Committe vote will take place on the 19 June 2025, with many analysts predicting more rate cuts by the end of 2025. According to Moneyweek, market pricing indicates that there could be three further cuts in 2025, so a Bank of England rate of 3.5% by the end of the year is more than a possibility.
While this predicted rate of 3.5% remains much higher than the pre-pandemic sub-1 rates, it is still good news for buyers looking to get onto the London property market, as well as homeowners worried about their mortgage affordability when their fixed rate expires.
The Bank of England has reported that in August 2026, first-time buyer mortgage demand dropped to its lowest level since December 2023.
Newly appointed Prime Minister Andy Burnham delivered his first speech in the House of Commons since taking up the position, and he
The Bank of England’s latest Money and Credit report has revealed that net borrowing of mortgage debt by individuals increased to £7.7
