Bank of England Cuts Interest Rates to 4.5%

The Bank of England has cut interest rates for the third time in just under a year, bringing the rate down to 4.5%. The move, supported by the majority of the Monetary Policy Committee, is aimed at boosting economic growth amid easing inflation, which currently sits at 2.5%. However, concerns remain that rising energy costs and other pressures could push inflation higher later this year. This is the lowest base rate since June 2023. The Bank of England has also adjusted its growth forecast, now expecting the UK economy to grow by 0.75% in 2025, down from an earlier prediction of 1.5%. The rate cut could lead to lower borrowing costs for some homeowners and businesses, but the impact will vary depending on individual financial arrangements. As lenders respond to the change, borrowers and savers alike will be watching to see how it affects their finances.

The Bank of England has lowered its key interest rate by 0.25 percentage points to 4.5%, marking its first cut in months.

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NI Housing Market:

It’s that time of year again when the crystal ball comes out and economists and analysts look ahead to what lies in store. While 2024 began with caution and concern, what materialised won’t look too bad in the history books. Average property prices reached £221k, up 6%, and typical rents now sit at £900 per month, rising 8.7% over the year.Encouragingly, the sales market is showing fresh signs of optimism, with new stock listed for sale up 8% year-on-year. However, the rental sector remains challenging, with listing volumes still well below long-term averages.On the leading indicator front, all signs point to a strong start for Q1 2025:<ul><li>Website visitors are up 20%.</li><li>Engaged Audience search time has increased 3%.</li><li>Enquiries to agents have risen 6%.</li><li>Agreed sales volumes are up 14% in the last three months, signalling a healthy pipeline of completions into the new year.</li></ul>The Outlook for 2025Overall, the year ahead looks more positive. Demand is improving, supported by a robust local labour market and a stable—potentially improving—interest rate environment. This should form the basis for relative stability, with modest price growth in the 3-5% and transaction levels forecast at around 25,000, in line with long-term averages.4 Key Themes to Watch<ul><li>Interest Rates &amp; Lender Competition: Mortgage rates are expected to soften gradually. Intense lender competition, particularly for re-mortgage business, will present opportunities, even if average rates remain modest.</li><li>Housing Supply: Sales stock has improved, but rental listings remain weak, and housebuilding is still below long-term averages. The recently published Housing Supply Strategy will be critical to addressing supply issues across all tenures.</li><li>Buyer Trends: First-time buyers remain the market’s largest group. While some softening in mortgage rates will help, affordability constraints may keep budgets in check.</li><li>Stamp Duty Changes: The revision to Stamp Duty Land Tax (SDLT) for Northern Ireland and England from April 2025 will likely have a limited local impact but could distort wider UK market trends, with potential knock-on effects here. &nbsp;</li></ul>In summary, the Northern Ireland housing market heads into 2025 with renewed momentum. Demand remains strong, sales activity is improving, and economic conditions are stabilising. While supply challenges persist, the outlook is for modest growth, increased buyer opportunities, and a market that continues to improve.<hr>To learn more about the Northern Ireland housing markets, visit our housing market reports for more insights.

Explore the Northern Ireland housing market outlook for Q1 2025, including trends in house prices, interest rates, and rental demand.

Bank of England Cuts Interest Rates to 4.5%

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