What does the Bank of England announcement mean for the property market?

Bank of England base rate holds steady: What it means for the Scottish property market

The Bank of England has held interest rates at 3.75% for the fourth consecutive time, keeping the Bank of England base rate at its lowest level since February 2023. The decision reflects continued caution around inflation, with higher energy costs and pressure on household bills, transport costs and expenses. According to Ofgem, the energy price cap is set to rise by 13% in July, affecting millions of households.

But what does this mean for the Scottish property market?

Holding interest rates at their current level may bring a greater sense of stability to the housing market. For buyers, and those considering their next property investment, the absence of a further rate change could help reduce uncertainty and support more confident decision-making. Stable interest rates can also provide reassurance for those monitoring mortgage rates and planning a move in the coming months.

The Scottish Government’s new first-time buyer scheme could also provide additional support for those looking to buy a home in Scotland. Launching later this month, the scheme will offer an interest-free equity contribution of up to £10,000, with applications opening at the end of June. The scheme will be limited to 2,000 households in its first 100 days, with the hope that this will assist 50,000 over this parliament.

Mortgage rates and property market trends: Expert insight

Independent Mortgage Adviser David Lauder provides insight into the recent interest rate announcement:

“The market remains consistent, although activity has softened slightly after a busy two to three months. This softer period is likely linked to the pending summer holidays, which typically brings a quieter period.

For buyers, reduced competition in the market could create opportunities. However, there may also be fewer properties coming to market during this period, which could make it harder to find the ‘dream home’.

The Bank of England’s decision to hold the interest rate was expected. Mortgage rate changes seem to be positive, with slight reductions, but changes remain slow and steady rather than game changing.”

While the market may be entering a seasonal slowdown, the combination of stable interest rates, improving mortgage affordability, and support for first-time buyers in Scotland could help maintain momentum across the Scottish housing market. Buyers and sellers alike will be watching closely for further signals from the Bank of England as they plan their next move in the property market.

How ESPC can help

If you're taking your first step onto the property ladder and need guidance on mortgages, the team at ESPC Mortgages is here to help. As independent mortgage advisers, they can support you with everything from understanding your budget and securing a mortgage to arranging the appropriate insurance cover.

You can also use our Mortgage Calculator to estimate how much you may be able to borrow and get an indication of your potential monthly mortgage repayments.

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