The Bank of England’s Base Rate heavily influences the rates set by banks and money lenders, so a cut can potentially have a significant effect on buy-to-let costs.
Elevated interest rates were one of the most significant issues affecting property investors in the 2024 market, so the first Base Rate reduction in August and the newly-announced cut in November were highly anticipated. Research from Rightmove suggested that many potential buyers were waiting for the first Base Rate cut before getting into property investment.
While the effects of the cut will not be felt immediately, this is good news for the market moving forward as the cost of borrowing is likely to become more affordable for investors currently in the buy-to-let sector with mortgaged properties, and those planning to enter the market with a mortgage.
The likelihood of interest rate cuts is also one of the factors taken into consideration by experts when putting together price growth forecasts. This has contributed to a more optimistic future outlook than initially expected. Savills has recently released its latest capital growth forecast with some regions such as the North West predicted to see substantial property price growth of nearly 30% in just five years.
At RWinvest, we target these high-growth areas to bring some of the best buy-to-let investment opportunities to our clients. Our latest off-plan launch, West One, is located in Manchester, one of the busiest rental markets in the country, and investors are primed to benefit from both strong forecasted capital growth in this region, and growing tenant demand.
