The Bank of England has just announced that the base rate will remain at 4.5%, in today’s review.
The Bank’s decision to hold the rate on 20 March aligns with expectations given current economic uncertainty and inflation, which rose by 3% in the 12 months to January 2025, exceeding forecasts.
While the base rate remains stable for now, there have been three rate cuts in recent months (in August, November, and February).
There has been some good news among lenders too. Several major banks have made small reductions to their mortgage rates on residential deals.
In addition, the housing market remains steady according to Halifax. The lender’s latest House Price Index showed that prices remained stable last month, dipping by just 0.1% in February compared to 0.6% in January. Halifax also reports that annual growth remains at 2.9% – unchanged from January.
Stamp duty changes are coming
If you’re hoping to move home this year, it’s important to be aware of the upcoming stamp duty changes.
From 1 April 2025, the nil rate stamp duty threshold for residential properties is changing. ‘Nil rate’ equates to the first portion of your property’s price and is charged at 0% stamp duty, meaning that up to that amount, you won’t pay any stamp duty.
• The nil rate stamp duty threshold for homeowners looking to move home will be lowered from £250,000 to £125,000.
• The nil rate stamp duty threshold for first-time buyers will drop from £425,000 to £300,000.
If you’re unsure how these developments might affect your plans, remember we’re here to help.
Will there be base rate cuts this year?
In the meantime, the base rate is predicted to come down later in the year, but it’s not certain by how much. Some analysts predict it could be around 4% or 3.75% later in the year but it’s impossible to say for sure. Any decision to reduce the base rate will be finely balanced due to inflationary pressures and other unpredictable worldwide events.