Interest Rate Cuts on the Horizon: Market Trends and New Housing Insights

Welcome to the latest Lessel Market Insights, where we bring you the latest news and insights on trends and data shaping the housing markets in the UK

This month, there's a lot to discuss with the Bank of England making its first cut to interest rates and the new Labour government outlining its housing policies. Although there’s still a way to go, it's encouraging to see that the long-awaited interest rate cuts are finally happening, which could have a significant impact on the housing market.

As Nationwide reported that house prices continued to edge upward, with annual growth reaching 2.1% in the year to July. This marks the first time house price growth has outpaced the underlying rate of inflation since September 2022. The Bank of England’s decision to cut the base rate is expected to positively influence market sentiment. As further rate cuts occur, more buyers may find it easier to pass lenders’ affordability stress tests, which could boost both buyer demand and purchasing power.

In our recent London Prime Rental report, we examine how rental growth at the top end of the market has significantly moderated. The latest Homelet index shows that annual rental growth across the country is at 5.2%.

If you’re considering your next investment property, looking for a new home, or thinking about selling, please reach out to Lessel.

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