The Bank of England has cut its base rate to 4.25%, in a move that has been welcomed by the BTL industry.
The Bank’s monetary policy committee voted 5-4 in favour of the 25bps rate cut, with two members preferring a cut of 50bps.
Two preferred to maintain the base rate at 4.5%.
“Substantial progress” on disinflation was highlighted as the reason for this by the Bank, with “restrictive” monetary policy curbing second round effects having stabilised long-term inflation expectations.
“For lenders and advisers operating in the BTL sector, this provides a welcome boost — a clearer signal that affordability continues to improve, giving more landlord borrowers the opportunity to secure the funding they need,” said Steve Cox, chief commercial officer at Fleet Mortgages, which sees this direction of travel strengthening confidence among landlords.
“Lower rates not only make deals more accessible but also ease the ongoing pressure on monthly mortgage payments — something that’s been front and centre for borrowers since the post-Mini Budget turmoil,” added Steve.
“The rate shift since the summer of last year has shifted that dynamic, supporting landlords in maintaining sustainable portfolios and opening up options for remortgaging and further investment.”
In agreement is Ryan Etchells, chief commercial officer at Together, who pointed to proprietary research that highlighted a third of landlords are planning to expand their portfolios in the next 12 months, for whom Friday’s news will be welcomed.
“Homeowners on variable rate and tracker mortgages will also feel the benefits of the central bank rate cut, as will BTL landlords, who have had to contend with higher costs and increased red tape over the past few years,” said Ryan.
“Those keen to seize an opportunity and move forward with their property plans are best to consider the wide range of financial products available, such as commercial and BTL and commercial mortgages or bridging loans for fast, flexible finance.”
With speculation rife about a potential cut, given tariff-inspired volatility, north London estate agent and a former RICS residential chairman Jeremy Leaf argued this has been largely factored in by homebuyers.
"Nevertheless, the reduction will serve as a welcome shot in the arm to activity which has been flagging lately since the stamp duty concession was removed at the end of March,” added Jeremy.
