The Bank of England’s decision to cut interest rates by a quarter of one percentage point has the potential to influence confidence in the housing market.

Sheldon Bosley Knight’s sales manager Lisa Hunt said such a base rate cut acts as a confidence boost for those looking to buy and sell and lower borrowing costs can make a house move “feel more achievable”.

She made the comments following the Bank’s decision today (Thursday, December 18) to lower the base rate to 3.75%, the lowest level since February 2023.

It is the sixth cut in interest rates from August last year and has been influenced by the Monetary Policy Committee’s target to keep inflation to 2%.

The latest inflation data from the Office for National Statistics showed a bigger drop to Consumer Prices Index (CPI) inflation than analysts had expected, falling to 3.2% in November, from 3.6% in October.

Lisa said: “Many homeowners and would‑be buyers across our areas are wondering what it really means for them. Even a small shift can influence confidence — and confidence is a powerful force in our local market.

“A base rate cut often acts as a confidence boost. Lower borrowing costs can improve affordability checks, and even a slight reduction in repayments can make a move feel more achievable.

“In Stratford‑upon‑Avon — where demand has remained steady for well‑presented homes, period properties, and village locations — this could encourage more buyers to step forward. More activity typically means more viewings, more offers, and a healthier, more fluid market.

“A 0.25% cut won’t transform affordability overnight, but it does signal a shift in momentum. After two years of volatility, buyers and sellers are looking for reassurance. Today’s move suggests calmer waters ahead — and that’s often enough to get people moving again.

For anyone considering a sale or purchase in the new year, this could be the nudge that turns plans into action.”

Oadby sales manager Leigh Chapple-Lynch agreed: “While a small reduction won’t dramatically change affordability overnight, it can have a positive impact on confidence.

“For some borrowers, especially those on variable or tracker rates, even a modest cut can ease monthly payments a little.

“For buyers, it’s often more about the sentiment and stability it signals, if people feel rates are starting to move in the right direction, they’re more likely to take the next step and commit to a purchase.”

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