The Bank of England cut interest rates to a record low 0.25% in today’s highly anticipated announcement.
Threadneedle Street also boosted its quantitative easing programme by £60bn and launched the Term Funding Scheme, which will give banks £100bn to issue low-interest loans.
UK property welcomed the first base rate cut in seven years, which was seen as a step toward stabilising the economy.
Ian Thomas, co-founder and director of LendInvest, said: “The fallout from Brexit could spell good news for professional and experienced property investors. If house prices do cool as predicted, investing in property will become even more enticing, particularly if today’s rate cut translates into cheaper financing.”
Andrew Burrell, head of forecasting at JLL, said the market had expected the cut and the decision was a sign that the Bank of England was trying to inject confidence into the economy.
He said: “It’s not a game-changing move but it is a step in the right direction. It will be a couple of quarters before we see the effect.”
However, Bank of England governor Mark Carney cut economic growth forecasts for 2017 to 0.8%, down from 2.3%.
This year’s GDP growth forecast was kept at 2%.
Adam Challis, head of residential research at JLL, said: “Today’s 25pt base rate reduction will signal to mortgagors that cheap mortgage rates will be around for even longer.
“This will benefit many would be home-movers and we are encouraged by the Term Funding Scheme, which will ensure lenders pass on most of the rate reduction to consumers.”
Challis added: “More important for the housing market is a strong, stable economy and the rate cut will help. Post-referendum, we need greater certainty that will encourage housebuilders, protect jobs, and ultimately provide a range of housing that people can afford.”
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