Today’s reduction in interest rates is good news for the property industry and the millions of people wishing to move, remortgage or get onto the housing ladder.
Acorn Group, and LRG generally, saw positive trading throughout 2024, with sales figures strong and an increasing number of new applicants. Today’s decision is a strong indication that growth is here to stay.
It is reassuring to see the BoE’s positive response to both sluggish growth and the welcome news that inflation is easing – as exemplified in December’s Consumer Prices Index (CPI) figures. It also puts some flesh on the bones of Rachel Reeves’ recent commitment to growth in which we expect her to deliver on in the Spring budget on 26 March.
An interest rate cut has rarely been so widely anticipated: prior to today’s announcement, the mortgage lenders already priced in a rate cut, as interest-rate swaps data indicated a 92% probability of a reduction from 4.75% to 4.5%.
For our customers, the good news is increased affordability for buyers, and good refinancing prospects for homeowners and landlords. Sellers will see higher demand as borrowing becomes cheaper, and consequently this is likely to drive up property prices, especially if – as we are seeing at the moment - the supply of homes doesn’t keep pace.
So after excellent results in 2024, we look forward to an even better 2025 and the likelihood, in many cases, of many purchases completing before the Stamp Duty deadline of 1 April.
Neil Louth, Chief Executive Officer, the Acorn Group (part of LRG)
