Buy to let brokers correctly predict Bank of England rate cut

Most buy to let mortgage brokers are predicting a reduction in the Bank of England’s base rate today (8th May), a survey reveals.

According to Landbay, 61% are expecting a 0.25% drop from the current 4.5% Base Rate.

The poll, which questioned 119 mortgage intermediaries, revealed that 71% anticipate a rate cut, while 11% foresee a more substantial 0.5% drop.

However, 27% believe the rate will remain unchanged, and a cautious 2% predict an increase.

Most brokers expect a rate cut

Landbay’s sales and distribution director, Rob Stanton, said: “Our findings reflect a cautious optimism among brokers and an expectation of a gradual easing of monetary policy – with a large majority anticipating a rate cut.

“While 61% think we’ll see rates fall 0.25%, a bullish 11% think we’ll see a 0.5% cut.

“That aligns with market expectations.”

He adds: “A significant number of brokers expect no change, or even a rise, which highlights some ongoing uncertainty in the market, driven, most probably, by persistent concerns over inflation.”

He says that a potential base rate may present opportunities for landlords and property investors keen to expand their portfolios.

Financial experts are also predicting a cut

Financial markets are confident in a rate reduction, driven by global economic shifts, including the impact of US President Donald Trump’s trade policies.

Data from LSEG initially indicated an 82% probability of the base rate dropping from 4.5% to 4.25%, but this rose to 100% following remarks from Megan Greene, a member of the Bank of England’s Monetary Policy Committee.

She suggested that US trade tariffs are more likely to reduce UK inflation than increase it.

Borrowing costs to fall

Economists also predict borrowing costs could fall at their fastest pace since the 2008 financial crisis, providing relief for mortgage holders.

The anticipated cut to 4.25% would mark the second reduction this year, following a drop from 4.75% to 4.5% in February.

Experts forecast further reductions, potentially lowering rates by 1% within six months, bringing borrowing costs below 3% for the first time since October 2022.

Barclays has projected rates could reach 3.5% by September.

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