Rate cut ignites home buying activity in Britain Al Khaleej Newspaper

Britain’s biggest lenders are continuing to cut borrowing costs, after the Bank of England’s first interest rate cut in four years boosted house-buying activity.
Barclays, Halifax, HSBC and NatWest are among the lenders now offering mortgages with a five-year fixed rate of less than 4%, lower than the Bank of England’s main interest rate of 5%.
The lowest level
According to a new report from property platform Rightmove, the current best five-year fixed interest rate is 3.83% for buyers with a 40% deposit. This represents the lowest level for this product since the UK’s disastrous September 2022 mini-budget.
This follows an earlier rate cut, which is in line with the bank’s 25 basis point rate cut earlier in the month.
Buy high
“The improving economic environment, as well as the political certainty gained from the UK general election in July, led to an immediate increase in buyer activity,” said Reitmove.
“The number of home seekers contacting estate agents for an offer has increased by 19% compared to last year following the Bank of England’s decision on August 1,” the portal said in its report, saying that this is a notable increase from the 11% annual increase recorded in July.
The number of new sellers coming to the market was also up 5% this month compared to the previous year. At the same time, the number of sales approved is 16% ahead of a period when the mortgage rate was close to the highest level a year ago.
Customer convenience
Tim Bannister, director of property sciences at Rightmove, said: “The interest rate cut has brought relief to property buyers,” expecting “activity to pick up further during the fall.”
He said in the report: “Although mortgage rates have not fallen significantly since the interest rate cut, the arrival of the long-awaited first cut and the start of falling prices is a testament to investor sentiment buy (agencies)