Bank of England reveals interest rate decision...

The Bank of England has cut base rate from 5.25% to 5.0% - its first cut in four years.

It was a close-run thing - the monetary policy committee of the Bank voted 5-4 for the cut.

A group of three committee members led by the Governor of the Bank of England, Andrew Bailey, switched their vote from hold to cut, giving a 5-4 majority in favour, compared with a 7-2 vote in June.

Here's reaction from across the property and mortgage sectors:

Jeremy Leaf, north London estate agent and a former RICS residential chairman: “In our view, when the interest rate decision has been so close to call it means the impact on the market will be relatively minimal one way or the other. Of course, some buyers have been holding off in anticipation of a cut for some time but mortgage rates ‘on the street’ have been softening over recent weeks anyway. The approximate 40 per cent of buyers who are not dependent on finance will probably be negotiating just as hard to take advantage of their better bargaining position. This reduction in rates to 5 per cent will certainly act as a shot in the arm for activity and buyer affordability over the short term at least, complemented by a strong employment picture.”

Guy Gittins, Foxtons chief executive officer: "We’ve already seen monthly mortgage approvals sitting at consistently high levels as pent-up demand across the market has been released and, in recent weeks, mortgage rates have continued to trend downwards, with several five year fixed term mortgages available with rates below four percent. With interest rates now starting to fall, we only expect that these positive property market trends will intensify.”

A spokesperson for John Charcol, the independent mortgage broker, says: "Today's Bank rate reduction announcement is a positive step for the property and mortgage market, marking the first interest rate cut in over four years finally kick starting the downward bank rate cycle. Positivity spreads quickly and while today’s rate cut would have already been priced in, this will undoubtedly revitalise activity. Mortgage holders nearing the end of their fixed-rate period and prospective buyers can now make informed decisions with greater confidence, rather than delaying and speculating."

Matt Smith, Rightmove’s mortgage expert: “The highly anticipated rate cut has finally arrived, and 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. This sets us up for hopefully further cuts to come, and when we have seen further reductions to the Base Rate, people should really start to see the impact. However, it’s important to keep in mind that mortgage rates are widely expected to eventually settle at higher levels than previously, with the market view that the base rate may eventually fall to about 3.25%."

Tim Bannister, Rightmove’s property expert: “This year we’ve seen signs that more people have adjusted to higher mortgage rate levels and generally, if they can, have been getting on with moves. The property market has been resilient, and even through the uncertainty of the recent election campaign, we saw home-moving activity continue on trend. Whilst I wouldn’t expect today’s Base Rate cut to lead to a rush of activity – as mortgage rates are still high and won’t drop significantly in the short term – it is likely to have a positive impact on home-mover sentiment which bodes well for the Autumn selling season.”

Iain McKenzie, CEO of The Guild of Property Professionals: “Many will breathe a sigh of relief following the Bank of England’s decision to cut the rate from a 16-year high of 5.25%. The cut will have a positive impact for both mortgaged homeowners and loan-dependent prospective buyers alike. While headline inflation fell to the Bank’s target of 2% in May, the decision to cut the rate was delayed due to services inflation remaining stubbornly high. While services inflation is still high, the BoE is looking at the long-term and economic growth."

Nicky Stevenson, Managing Director at Fine & Country: “The wait is over, with the first rate cut since 2020, positive news for the property market. Despite headline inflation falling to the targeted 2% in May and remaining at target in June, the Bank remained cautious about making a decision too soon that could reignite inflationary pressure. However, today’s decision was about balancing inflation pressure while stimulating economic growth over the long term.

Tom Bill, head of UK residential research at Knight Frank: “The wait for the first rate cut since March 2020 and the hullabaloo of a general election was not a conducive combination for homebuyers this summer, many of whom switched off early for the holiday period. Now there has been a cut, demand and transaction activity will increase when the autumn market gets underway in September and more mortgage rates fall below the 4% psychological threshold.”