At its meeting on 6 August 2025, the Bank of England (BOE) Monetary Policy Committee (MPC) voted by a majority of 5-4 to reduce Bank Rate by 0.25 percentage points, to 4%, rather than maintaining it at 4.25%.
They stated: “At this meeting, the Committee voted to reduce Bank Rate to 4%. A gradual and careful approach to the further withdrawal of monetary policy restraint remains appropriate. The restrictiveness of monetary policy has fallen as Bank Rate has been reduced. The timing and pace of future reductions in the restrictiveness of policy will depend on the extent to which underlying disinflationary pressures continue to ease.”
Industry reaction
Nick Leeming, Chairman of Jackson-Stops, said: “The Bank of England’s ‘gradual and careful’ approach remains firmly in place, even against a shifting economic backdrop. While widely expected, today’s cut underscores the need to strengthen confidence amid signs of a softening labour market.
“For mortgaged homeowners wanting to make their next move this decision offers timely relief, and lower borrowing costs should help to unlock activity across the market.
“Regional disparities continue to shape market performance. In the mid-high end of the market, towns like Bury St Edmunds, Chichester and Colchester are seeing renewed buyer interest and modest price growth. Meanwhile, high completion levels in Colchester, Hale, Northampton, and Sevenoaks reflect sustained demand in lifestyle-led, commuter-friendly locations.
“These pockets of resilience highlight the realities of a market, driven by needs rather than nice to haves. As affordability improves and sentiment stabilises, we expect these regional strengths to continue driving market performance through the second half of the year.”
Nick Hale, CEO of Movera, said: “The Bank of England’s decision to cut interest rates for the third time this year by 25 basis points is a welcome boost for the mortgage market, with some lenders already reducing their rates ahead of time. Crucially, this continues to offer relief for borrowers and should lead to an increase in buyer momentum and demand for remortgages.
“With further interest rate cuts expected to follow – enabling transactions to increase further - it is crucial that the sector works quickly to streamline the homebuying and remortgaging process to ensure these transactions are dealt with quickly and efficiently. Our aim is to support the industry through this process, providing digital products and solutions that can make this a reality.”
Guy Gittins, CEO of Foxtons, said: “This interest rate reduction, along with improving mortgage affordability and changing lending criteria from the new mortgage guarantee scheme, all provide further reassurance and stability for buyers and investors.
“As we move into the second half of the year, our outlook remains cautiously positive given the continued appetite for vendors to bring great property to the market, while taking into consideration wider macro-economic factors.”
Thomas Cantor, Co-Head of Short-Term Finance at West One Loans, said: "While the Bank of England’s decision to cut the base rate today is a positive move for the property market, it’s important to note that this move has already been largely priced in by lenders.
“The expectation of a rate cut has been building for some time, however, it will continue to support market confidence and allow developers to move forward with critical housing projects.
“Specialist finance will continue to play a key role in ensuring projects are funded and completed, contributing to the ongoing stability and growth of the property sector."
