The Bank of England (BoE) has reduced interest rates by 0.25% to 5.00%, which represents the first drop in the base rate since the onset of the pandemic in March 2020. The BoE’s rate setting committee voted by a majority of five to four to reduce the rate.

Paresh Raja, CEO at Market Financial Solutions, said: “The base rate has finally been cut, easing the barriers that have constrained the UK property market amid two years of high inflation and borrowing costs. I expect to see increased market activity in the coming weeks as a result.

“In recent months, we’ve seen a growing sense of optimism. With property prices and the volume of homes coming onto the market on the rise, today’s decision will likely encourage investors, who have been holding back, to re-engage. Despite the rate cut, however, borrowing costs remain extremely high.”

Ben Nichols, interim managing director at RAW Capital Partners, added: “After rates reached their highest level in 16 years, today’s decision will provide much-needed relief, and I expect to see an uptick in activity in the UK property market as a result.”