A Winter Rate Cut to Thaw the Market
Today’s reduction in interest rates is very welcome news - for homeowners, buyers, property professionals, and no doubt Government ministers.
This warming news is set against a chilly backdrop: unemployment has increased to 5.1%, while the November Budget tightened the fiscal screws. Inflation, however, has eased to 3.2% and, thanks to today’s cut, looks likely to continue on that trajectory.
With a reduction in interest rates we expect an increase in activity and therefore transactions. Across LRG brands, applicant numbers are already up 15% year-on-year in December and we’re seeing a significant number of vendors ready to launch in early January.
Two year and five year fixed rate mortgage pricing has already shifted in anticipation and tracker borrowers will also feel the benefit.
In the run up to the November Budget it felt like the market has been driving with the handbrake on, but it was released following the Chancellor’s speech on 26 November. In fact from a property perspective the Budget proved more neutral than the rumour mill was suggesting.
In the meantime, we anticipate a busy start to 2026, which will then gain momentum potentially two further rate cuts to come resulting in greater affordability and less volatile market conditions.
Kevin Shaw, National Sales Managing Director, LRG
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