UNSURPRISINGLY, a lot of attention was paid to the announcement at the start of August that the Bank of England was cutting the base rate to 5%.

Everyone knows how crucial the BoE base rate is in so many areas – particularly the property finance sector in which we at GB Bank operate – but in some ways, the news added to an encouraging environment rather than creating one.

Take a look at some of the other economic and property sector indicators and you can see that things appeared to be on an upward trend even before the Monetary Policy Committee made its move.

For example, Nationwide reported in July that UK house prices had seen their biggest rise since December 2022. While prices still remain below their summer 2022 peak, that also spells opportunity for investors to take advantage of a rising market – a move which will be helped by the interest rate cut, of course.

Dig a little deeper into the nuts and bolts of the UK housing market and you see further reasons to be optimistic about future prospects.

Estate agency Zoopla reported in July that the market had reached a level of supply and demand balance not seen since 2019 with seller numbers rising and demand for homes remaining high. Zoopla also reported a significant jump in the number of house sales agreed, up 16% on the same period in 2023.

A healthy and growing housing market means investors are inclined to be more active and that is certainly something which we at GB Bank have seen.

Demand for buy to let and residential finance products in particular has been high in recent months and competition between lenders in this sector is hotting up as a result.

However, the nature of the buy to let market does seem to be changing with fewer single property landlords and more landlords with multiple property portfolios. Trade body UK Finance noted in July that landlords with just one rental property “are more likely to feel the pinch from higher interest rates” while lender Landbay reported in June that 42% of landlords with four to ten properties were planning to add to their portfolios compared with just 19% of landlords with one to three properties.

As a bank which specialises in lending to experienced SME property investors and developers, this is something which we have seen in our own business. Indeed, such has been the demand on the residential side that we increased the ceiling of our specialist residential finance solutions up to £10m earlier this year.

We would certainly agree with Bank of England Governor Andrew Bailey that August’s rate cut was “an important moment in time”, but other moments are likely to be just as crucial in the months to come.

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