In response to the Bank of England cutting the base rate from 5.25% to 5%, Andrew Lloyd, Managing Director at Search Acumen, comments:
“The tide is now turning, signalling a shift in economic strategy”
“The Bank of England’s decision to cut interest rates today marks a significant turning point – the first base rate cut since 2020. The tide is now turning, signalling a shift in economic strategy that many hope will revitalise investment in real estate.
“For investors, this rate cut offers a glimmer of hope after a prolonged period of caution. Lower borrowing costs, along with more political stability now the election news has settled, should help to stimulate activity and encourage new acquisitions, too. If rates continue to decrease, we will see increased liquidity in the market as investors reassess their portfolios in light of more favourable financing conditions.
“However, it’s important to match enthusiasm with realism. While this rate cut is a positive step, the market is not without challenges and the recovery of long-term occupier demand in particular is something we may not see for some time yet.
“Nevertheless, this decision could be the catalyst needed to start this journey and boost sector confidence. If rates return closer to 4% by the end of the year, we are also likely to see lenders to revise their risk appetites, potentially easing access to finance for developers and investors. Those who act decisively will find themselves better positioned to capitalise on emerging opportunities.”
