As expected, the Bank of England cuts rates again.
Yesterday, the Bank of England announced another interest rate reduction, lowering the benchmark rate from 4.5% to 4.25%. The Monetary Policy Committee's (MPC) decision aligns with market forecasts, marking the fourth rate cut since August 2023 and the second this year.
Notably, the MPC vote revealed significant division: among nine members, two advocated a steep 50-basis-point cut, two pushed to hold rates steady, and the remaining five supported a compromise 25-basis-point reduction.
Most analysts now predict at least two more 0.25-percentage-point rate cuts this year, citing persistent global economic uncertainties. While the move benefits mortgage borrowers—with lenders already slashing loan rates in anticipation—the housing market tells a different story.
A separate headline-grabbing development: UK house price gaps between detached homes and flats have hit a 30-year high. Zoopla data shows the average detached property cost £319,500 in January 2025, compared to £191,300 for flats—a 1.7x premium, the widest margin since 1995.
Halifax adds context: London's house price-to-income ratio stands at 8.22, far exceeding the national average of 6.55. This means a typical London household would need nearly 8.3 years of savings (without spending) to afford a mid-priced home.
Zoopla's Executive Director Richard Donnell comments: "The price gap between houses and flats isn't new, but pandemic-driven preferences for larger living spaces accelerated the divergence."
Source: "Gap between prices of UK flats and houses 'widest in 30 years'"
Have you wondered what's driving this shift? As urban fatigue grows, more buyers prioritise rural simplicity over city hustle.
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