In this article, we explore what the latest reduction in UK interest rates means for buyers and movers, and whether now could be the right time to make your move.
What has happened to interest rates?
At their latest meeting, the Bank of England cut the official Bank Rate to 4%. This is the lowest level since early 2023.
Some experts were surprised by the decision, particularly as the Bank predicts inflation will rise to 4% next month, which is double its target of 2%. Typically, higher inflation would result in interest rates going up rather than down.
Will interest rates go any lower?
Bank of England Governor Andrew Bailey has indicated that any future reductions will be taken cautiously. He stated, “It remains important that we do not cut Bank Rate too quickly, or by too much,” adding that monetary policy is “not on a pre-set path.”
Following the announcement, opinions are divided on whether we will see further cuts to interest rates this year.
Is this a good time to move?
On the surface, lower interest rates are welcome news for anyone seeking a mortgage. Many lenders have already reduced their mortgage rates in anticipation of the Bank’s decision. (It is worth remembering that the rates charged by lenders are not the same as the official Bank Rate.)
However, there is a factor to consider. As more buyers take advantage of lower borrowing costs, demand could increase, homes may sell faster, and property prices could start to rise.
The latest Halifax House Price Index suggests there is a link between improved affordability and rising house prices. If that happens, any savings from lower mortgage repayments could be offset by higher purchase prices.
Consider your options
At the moment, there may be a window of opportunity if you are thinking about moving home, buying for the first time, or investing in property.
- Check what is currently available on the market.
- Obtain a valuation if you have a property to sell.
- Work out your budget and decide what you can comfortably afford.
- Explore your mortgage options and seek professional financial advice. (This article does not constitute mortgage advice.)
Ultimately, the decision comes down to your circumstances, but for some, the current market conditions could provide an ideal moment to act.
If you are looking for a property to buy, contact us to see what we have available. If you are planning to sell, get in touch for a free valuation and tailored marketing advice.
Source: Halifax HPI, 7 August 2025
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