Bank of England cuts base rate to 4.5%

The bank base rate has been cut by a quarter percent and is now at its lowest rate since June 2023. This latest cut is set to bring more confidence to an already strong market, with mortgage lenders offering cheaper loans and improving affordability for borrowers.

Meanwhile, the price of a typical UK home rose by 4.1% year on year in January, according to Nationwide. This shows a modest slowing in the annual pace of growth compared with December. The housing market continues to show resilience despite ongoing affordability pressures, the lender adds. While there has been a modest improvement over the last year, it remains stretched by historic standards.

A significant proportion of first-time buyers have to draw on help from family and friends to raise a deposit. In 2023/24, around 40% of these buyers had some assistance, either in the form of a gift or loan from family and friends, or through inheritance.

Around 55% of homeowners own their property outright, and this has increased by 1.3 million over the past years to reach 8.7 million. Older households aged 65+ have seen outright ownership increase from 4.5 million to 5.4 million over the last decade.

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