The base rate has been cut by 0.25%, a little figure that could be the big boost the market – and London’s homebuyers – need as we approach the end of 2024.
For many, it was a disappointment to not see a stamp duty extension in the recent Autumn Budget. However, this new development is sure to lift spirits.
Key takeaway:
You'll need to act quickly to beat the 1 April Stamp Duty Cut deadline, but with rates falling and great stock levels in London, you' ve got the opportunity now to make your move.
Buyers are ready
When rates drop, they entice those who have been previously priced out of the market to take the plunge. So, we're expecting to see a surge in new buyer activity in the coming months, and that’s not even taking into account the seasonal trends.
The new year typically brings a huge wave of buyers to the market, with viewing requests flooding into Foxtons. So, November is a good time to get started; you’ll have narrowed your search, if not placed an offer, by the time the New Year rush hits.
And of course, the stamp duty relief deadline, 1 April 2025, will give buyers another strong reason to act fast.
At Foxtons, our experienced sales team will guide you through every step. Whether you're a first-time buyer, or a homeowner making your next move, we’ll help you get it done.
Good news for a great market
The property sector has been showing strong signs of recovery this year, as the lending landscape steadies. Joe Divito, Sales Area Director - Central South & Private Office, describes:
"Our clients are particularly well-positioned for this growing market – we've just completed our strongest quarter in sales in nearly a decade. We have seen a 31% increase in Applicant Enquires in the last month versus the same period last year, and 33% in the last 7 days.
The quality of buyer engagement is especially encouraging and we’re working with more focussed buyers who are transacting. I expect, as the 2025 market unfolds, we’ll see even more of this to come."
We expect this latest rate cut to further ignite buyer interest and get the market firing on all cylinders. Richard Merrett, Managing Director of Alexander Hall mortgage advisers, says:
“Many homeowners and potential buyers will be wondering how this reduction could impact their costs and financial confidence. Those on variable rates or tracker mortgages will benefit from the reduced rates immediately. This will help offer some breathing space for them amidst higher living costs.
For homeowners on fixed products this rate cut won’t provide any immediate relief but will boost confidence that when their product does come to an end it will be more manageable compared to the high interest rates we have seen since Sept 2022.
This change should help release pent-up demand in the market, restoring confidence amongst buyers and those looking to move home who had delayed plans due to higher rates. Over the short and medium term, we may see rates reduce further which could help movers manage the costs associated with upgrading or relocating. Couple that with the increase in stamp duty on 31st March for the majority of first time buyers and home movers, and I think we will see a rise in demand, which will also help to boost buyer confidence and potentially speed up transactions.”
What to do now
The great news is that there's a good level of stock on the market, so the incoming demand is less likely to drive up house prices like it would in a heavily undersupplied environment. However, with competition growing and stamp duty looming, it's a good idea to get started now:
1. Tell us what you're looking for – register your search on My Foxtons and we’ll help you find it.
2. Contact a mortgage adviser, like Alexander Hall, to explore your budget, find the best products to support your purchase, and get your mortgage Agreement in Principle – you’ll need this when you make an offer.
3. If you’re a homeowner, your first step is to book a Foxtons valuation, so we can help you set the right price and build the right strategy.
4. Browse our current listings to plan your first viewing.
A note on ‘base rate’
Base rate sounds a bit technical. When it’s cut, like yesterday, the most exciting part is that lenders often drop the interest rates for mortgages – which is why you’ll see more about interest rates in the news.
What does the base rate do for you?
It improves sentiment for sellers, buyers and – most importantly – lenders.
Richard Merrett explains, “A Base Rate cut doesn’t just mean potentially cheaper mortgage payments, but will also gradually have a positive impact on buyer’s borrowing power, as many lenders will also reduce the rates at which they stress affordability. This could mean a slightly higher loan can be achieved which could be the boost a buyer needs in their property search.”
Great news if the mortgage you can get isn’t quite enough to fund the property you need. But you don’t need to wait for a 'gradual impact.'
Alexander Hall can share extensive mortgage options, including products from lenders already adjusting their affordability criteria, and navigate the changing market for you. Paired with Foxtons expertise in finding you the right home, your next move is closer than you think.
Source: This information for this article was provided by and reviewed by the Foxtons Sales team and Alexander Hall mortgage advisers, to ensure you have the most valuable information in front of you when you’re navigating buying and selling property. If you have any questions on the blog information, get in touch. We’re always happy to help.
