Interest Rates Cut to 4%: What This Means for the Herts & Essex Property Market

The Bank of England has reduced interest rates to 4 percent, marking its fourth cut in less than a year and the lowest base rate we’ve seen in two years. This follows the previous reduction in May and comes alongside a modest upward revision to the UK’s 2025 economic growth forecast, now expected to reach 1.25 percent.

This latest cut is a significant moment for buyers, sellers and homeowners. Lower interest rates tend to ease borrowing costs, making mortgages and loans more affordable. For many, this could mean reduced monthly payments or better access to financing. On the other hand, savers may see smaller returns in the short term.

From a local perspective, this is a positive signal for the property market in Herts and Essex. More affordable borrowing will likely encourage first-time buyers, support those looking to remortgage and provide renewed confidence to homeowners considering a move.

Across the UK, property market activity is already showing signs of recovery. There have been 796,000 home sales so far in 2025, which is a 7.5 percent increase on the same period in 2024. While this is encouraging, it is important to note that the impact of the rate cut on actual mortgage products may take some time to filter through. Lenders have adopted a cautious approach and are still adjusting to the evolving economic landscape.

Looking ahead, the Bank of England’s next steps will depend largely on inflation and broader economic trends. Inflation is expected to rise slightly in the coming months, but there is hope that it will ease again before the end of the year. These factors will play a key role in shaping future interest rate decisions.

In the meantime, this latest rate cut brings some welcome stability and reassurance for buyers and sellers in our local property market. Improved affordability should support steady demand, and we anticipate a stronger finish to the year if economic conditions remain favourable.

If you are thinking about moving, remortgaging or would simply like advice on how this change could affect your plans, our team is here to help. We are always happy to offer local insight and guidance to help you make informed property decisions.