Property deals closed every month now exceed 100,000 units
The Bank of England's decision to lower the interest rate to 4% in August 2025 has set a positive momentum for the UK property market. Experts predict an increase in property transactions for the remainder of 2025 and into 2026, as lower borrowing costs enhance affordability for buyers and investors.
The positive trend is attributed to the increased demand resulting from the rate cut. Colby Short, co-founder and CEO of GetAgent.co.uk, believes that the boost in demand is a much-needed stimulus for the market, pushing transaction volumes up.
The rate cut is not a one-time measure, as market commentators and the Bank of England anticipate at least one more rate cut by the end of 2025, potentially two. This could sustain further improvements in mortgage rates and transaction levels.
Despite the base rate reductions, average mortgage rates have declined more slowly. However, further rate cuts may compel lenders to reduce rates more significantly, increasing affordability and potentially accelerating market activity.
The lower rates, if managed carefully to avoid renewed inflation, are projected to support price stability and a more regional, balanced housing market recovery. The Bank of England aims to maintain low and stable inflation while monitoring economic growth, inflation, and employment data before making any additional cuts.
The increased transactional volume is not limited to residential properties. Reduced borrowing costs and an improved economic tone may unlock previously held-back investment capital, increasing transactional volume in commercial properties as well.
Colby Short also mentioned that the increase in transactional volumes is only now being seen, and the market is unlikely to return to full strength until next year. Despite the slow start, the UK property market shows promising signs of recovery, with the number of transactions exceeding 100,000 for the first time in almost two years in August 2024.
In conclusion, the property market is projected to see a sustained increase in transactions following the August 2025 interest rate cut, driven by improved affordability and lender response, with more rate cuts likely stimulating further activity through late 2025 and into 2026.
Investors in the real-estate sector may find opportunities for growth within the housing market, given the forecast of increased property transactions due to lower borrowing costs. The continuous decline in mortgage rates, facilitated by potential additional interest rate cuts, could escalate market activity, particularly in commercial properties.
