"Although the Bank of England held rates steady last month, its slow and well-thought-out approach has meant that lenders are responding to an overall trend and establishing a degree of predictability in the market"
- Caroline Marshall-Roberts - BuyAssociation
Recent weeks have seen a wave of mortgage rate reductions from several lenders, a development that offers a more optimistic outlook for borrowers and property investors alike. These moves come even as the Bank of England maintained the base interest rate at 4.25% last month, with lenders responding to broader economic indicators rather than immediate changes to central policy.
Caroline Marshall-Roberts, chief executive and founder of BuyAssociation, shared her thoughts on what the shift in lending behaviour could mean for investors and how they might approach the market in the months ahead.
“The decision for lenders to lower mortgage rates is a clear sign that they are starting to anticipate upcoming change,” said Marshall-Roberts. “Although the Bank of England held rates steady last month, its slow and well-thought-out approach has meant that lenders are responding to an overall trend and establishing a degree of predictability in the market. This means that investors can plan with more confidence now, knowing that they can make decisions without the immediate threat of rising costs and repayments.”
Marshall-Roberts also offered practical advice to help property investors navigate current market conditions:
Reassess your financial position
With mortgage rates stabilising and further reductions potentially ahead, investors are encouraged to review their financial standing. Those on variable-rate mortgages may benefit from switching to a fixed-rate product. Locking in a more favourable rate could offer protection from future rate hikes and support clearer financial planning.
Track inflation and economic forecasts
While the Bank of England’s decision to hold rates may suggest stability, it does not guarantee future cuts. Monitoring inflation trends and monetary policy signals can help investors anticipate changes and align their investment strategies accordingly.
Optimise existing assets
Instead of expanding portfolios, some investors may benefit from improving the performance of properties they already own. Options include refurbishments, upgrades to energy efficiency, or improving tenant experience to secure longer-term, more reliable rental income.
Explore lower-value opportunities
Investors looking to mitigate risk could consider targeting lower-value properties or regions with more affordable entry points. This strategy may help preserve cash flow and reduce borrowing exposure in the event of future market changes.
Maintain competitive rental pricing
Sustainable rent levels remain a key factor in ensuring occupancy. Setting rents at a market-aligned level helps reduce the likelihood of tenant turnover and costly vacant periods, particularly important during times of economic uncertainty.
As lenders adjust their pricing models in response to shifting economic conditions, investors are watching closely for signs of further rate movements. While challenges remain, improving rate predictability and steady inflation data may signal a more stable landscape for the remainder of the year.
