What will the interest rate drop do to the Greater Exeter Area Property Market?

The recent decision by the Bank of England to reduce interest rates to 4.75%, following a similar cut in August, is set to further bolster buyer confidence and stimulate market activity across an already vibrant Greater Exeter Area property market, says Roger Wilkinson, Principal of Wilkinson Grant & Co.

Dual Impact

This rate reduction is expected to have a dual impact. Firstly, it sends a clear positive signal for mortgage rates, encouraging lenders to consider more competitive mortgage products, making property purchases more affordable for buyers. This move should help to energise the market, as lower borrowing costs are likely to draw renewed interest, particularly from those who have been waiting for a favourable lending environment.

Encourage Buyers

Secondly, with property supply in the South West reaching its highest level since 2014, buyers now have more choice, contributing to a more fluid and dynamic market. This additional choice, combined with the affordability boost from the rate cut, is expected to draw in previously hesitant buyers, creating a surge of activity as the year draws to a close. Such heightened buyer interest may increase competition, especially in high-demand areas, providing a strong opportunity for sellers who position their properties competitively.

Realistic Pricing

However, sellers should remain mindful of pricing strategies. Even with a larger pool of buyers and more available stock, the market remains price-sensitive; properties set at ambitious prices may not attract the attention needed to secure a sale. Realistic pricing aligned with current market trends is essential to maximise sale prospects in this environment.

Benefit First Time Buyers

First-time buyers stand to benefit especially, as they not only gain from reduced mortgage rates but also from an increased number of properties on the market. Improved affordability may prompt these buyers to act, particularly with potential stamp duty changes on the horizon in April. With inflation pressures easing, this rate cut places the Greater Exeter Area in an advantageous position for both buyers and sellers as we head into 2025.

Robust Start to 2025

Looking forward, experts forecast a robust start to 2025, with the possibility of continued gradual rate reductions. This evolving interest rate landscape may lead to what some have described as a “supercharged” level of activity, as buyers seek to complete transactions ahead of potential further changes to stamp duty. The rate cut signals confidence in the UK’s economic recovery—a sentiment likely to resonate throughout the Greater Exeter Area property market, fuelling buyer enthusiasm in the months to come.