Bank of England cuts interest rate for first time in four years

Written by Anne Elliss on 20th September 2024 | 4 minute read

Residential property review August 2024

The Bank of England has reduced Bank Rate for the first time in more than four years.

The rate is now 5%, having been held at 5.25% since August 2023, after 14 consecutive increases. The Monetary Policy Committee (MPC) marginally voted in favour of reducing Bank Rate, by 5 votes to 4. Many major mortgage lenders had already reduced their rates in anticipation of the cut and more are expected to follow suit. Despite this, the reduction is not expected to make a significant difference to mortgage affordability overall, however it is hoped to be the first of more cuts which should alleviate some of the financial pressures on homebuyers.

Matt Smith, Rightmove’s mortgage expert, commented, “While those looking to take out a mortgage soon shouldn’t expect to see drastically lower mortgage rates, we would expect the downward trend we’ve started to see continue.”

Renters’ Rights Bill – what’s in it

The government has released notes on what to expect in the Renters’ Rights Bill, which is due to introduced in the autumn.

As promised in Labour’s manifesto, the Bill will include the end of ‘no fault’ evictions but will have clear possession grounds for landlords needing to reclaim their properties. Renters will also have improved rights enabling them to challenge rent increases. Plus, the government plans to end ‘bidding wars’ on rental properties, although property experts Rightmove commented that this may be difficult as there are currently 15 prospective tenants for every rented property.

Tenants will gain the right to request a pet, which the landlord must consider and cannot unreasonably refuse, however they can request appropriate insurance is purchased to cover any accidental damage. A Decent Homes Standard is also expected to be applied to the Private Rented Sector to improve the quality of rental properties.

The UK’s fastest selling homes

Research by Zoopla has revealed the homes that sell the fastest in the UK.

In England and Wales, almost half (49%) of homes find a buyer within 30 days of going on the market. This figure increases to 75% in Scotland where properties are valued and surveyed upfront, thus speeding up the homebuying process.

In Q2 of this year, the fastest-selling property type on Zoopla was two-bed terraced houses, which took an average of 27 days to sell. It then usually takes another four months for the transaction to be completed. These properties appeal to a range of buyers, from first-time buyers to empty-nesters looking to downsize. Notably, there is also more competition for this kind of home due to limited supply, as they made up only 7% of new properties listed in the last three months.

Interestingly, the slowest-selling properties are detached homes with at least four bedrooms, taking an average of 40 days before a sale is agreed. This is probably due to associated higher mortgage costs combined with a spike in supply of larger homes.

All details are correct at the time of writing (19 August 2024)

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All details are correct at the time of writing (19 August 2024)

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