Small interest rate cut but ripple effect can boost UK rental market – Principle

Jaime Duffy, lettings business development manager at Principle, said: “For landlords and property investors, this isn’t just a small percentage drop, it’s a financial opportunity with real potential to boost your portfolio, increase returns, and strengthen your position in the lettings market.” 

She explained that the base rate, set by the Bank of England’s Monetary Policy Committee, influences borrowing costs across the UK. When it falls, lenders often reduce interest rates on mortgages and loans, making it cheaper to borrow. 

“For property investors, this can mean lower monthly repayments on existing variable-rate mortgages, access to more competitive fixed-rate deals when refinancing and cheaper finance options when purchasing new investment properties. 

“With borrowing costs reduced, your cash flow can improve significantly — freeing up capital that can be reinvested into property improvements, portfolio expansion, or just maximising profits.” 

She said the lettings sector was already seeing strong demand, with many renters competing for quality properties. 

“A lower base rate could have a ripple effect, triggering more investment activity, property upgrades and promoting stability in rental prices.” 

Lower borrowing costs make it easier for landlords to buy, meaning more rental stock could enter the market creating a better supply and demand. 

With improved cash flow, landlords may have more scope to refurbish or modernise their properties, attracting higher-quality tenants and providing better living standards, required in the upcoming Renters Reform Bill. 

Landlords benefiting from reduced mortgage costs may be able to keep rent increases modest while still maintaining a healthy yields. 

Duffy added: “Put simply, this rate cut could spark more activity, lead to better-quality homes, and make the rental market busier and more competitive. 

“Interest rates move with market conditions — and there’s no guarantee they’ll stay this low for long. Acting now could allow you to lock in a favourable mortgage rate before further changes.”

She urged landlords and property investors to act now and grasp the opportunity to refinance and reduce monthly mortgage payments, potentially acquire additional properties while borrowing remains affordable, and increase rental yields by improving and expanding portfolios.

She said: “At Principle Estate Management, we’re all about helping landlords get the most out of their properties. From finding great tenants to boosting your rental income, our lettings and management team makes owning a rental simple and stress-free.

“Whether you’re thinking about refinancing, buying your next place, or just want your current rentals to perform better, we’ll help you make the most of this moment in the market. Now’s the perfect time to plan your next move – get in touch and let’s talk about how we can help you hit your investment goals.”

Ms Duffy recently joined a staff of more than 100 at Principle Estate Management, which has experienced a 25 per cent jump in units under its management over the past six months to 25,000.