The Bank of England has cut interest rates from 5% to 4.75%, providing some welcome cheer for landlords looking to invest and remortgage.

After a Budget which hit BTL investors with a 2% increase in the higher rate of Stamp Duty for additional properties, the Bank was prompted to act by the lower inflation rate, which fell to 1.7% in September - although it warns inflation will creep higher again.

The Bank’s Monetary Policy Committee, headed up by Andrew Bailey (main image) last cut rates from 5.25% to 5% in August, the first drop in more than four years following a string of increases. ONS figures have also showed that wage growth slowed to its lowest pace for more than two years.

Appropriate

The committee’s report said: “Based on the evolving evidence, a gradual approach to removing policy restraint remains appropriate. Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further.”

Mortgage rates are still much higher than they have been for much of the past decade but

more than one million borrowers on tracker and variable deals could now see a fall in their monthly repayments.

Propertymark’s CEO Nathan Emerson (pictured) says the announcement is welcome news for buyers. “With the Bank of England’s most recent Money and Credit Report revealing net mortgage lending has further increased by 0.9% in September, up on the 0.7% seen in August, coupled with proposed changes to Stamp Duty thresholds from next April, it’s highly likely we may see buoyant activity in the market across the winter months,” he says.

Matt Thompson, head of sales at Chestertons, echoed the sentiment, adding: “We predict the boost in buyer confidence to result in the property market being busier than expected for this time of year.”

Rightmove’s mortgageexpert, Matt Smith (pictured, right), says: “This Base Rate decision comes at the end of a run of important macro-economic and political events on both sides of the Atlantic.

"All of this has resulted in a view that [the] Base Rate will be cut at a more moderated pace than previously expected and has been priced in by lenders. Therefore we are likely to see average mortgage rates drift up a little in the short term, before starting to fall back again.

 “Today's decision will probably help relieve pressure on lenders to increase rates as we had started to see. If the last few weeks has taught us anything, it is that the UK mortgage market remains competitive, but headline pricing will continue to be impacted by events both in the UK and overseas."

‍

The next rates update is due on 19th December.