Impact of Bank of England's Interest Rate Cut on the Property Market

The Bank of England recently announced a reduction in interest rates from 5.25% to 5%, the first such cut since the start of the pandemic in March 2020. This decision, described by the Bank's governor Andrew Bailey as "an important moment in time," aims to provide relief to borrowers and boost economic activity, although he cautioned against expecting further sharp falls in the near term. This cut was made possible by a slight decrease in inflation, although the Bank remains vigilant about maintaining low inflation levels.

Immediate Effects on Mortgages and Borrowing Costs

The interest rate cut has immediate implications for homeowners and businesses. Those with tracker mortgages will see their monthly payments decrease, and those on variable rate deals may also benefit. This reduction is expected to improve consumer confidence, which has been subdued due to high borrowing costs.

What Does The Interest Rate Cut Mean For Me As An Investor with Acorn?

Melanie Omirou, Group Managing Director of Acorn Property Invest, shared her perspective on the positive impact of the rate cut on the property investment sector. She stated:

"Following the much-anticipated rate cut and the predicted further reductions this year, I am pleased to report that we are already experiencing an immediate decrease in development finance costs, which will boost the profitability of our developments and strengthen our overall business. We are also excited to observe an immediate increase in enquiries and we expect a surge in sales activity as lower mortgage rates and growing market confidence drive up our company's revenue.

"For our investment arm, API, investors in fixed-rate products can continue to enjoy stability, while those in our recent tranches are enjoying some of the most attractive rates we've ever offered. Investors in our site-specific projects and profit share model can anticipate increased profitability as a result of lower financing costs for each site.

This does mean we will now begin to lower the rates on future tranches of our fixed return investments to reflect lower base rates which will make our current offerings even more competitive."

How can I invest with Acorn?

If you are a certified investor interested in investing with Acorn, please register on our platform to discover the various property development investment opportunities we have available.

YOUR CAPITAL IS AT RISK IF YOU INVEST 

Investment opportunities available via Acorn Property Invest are exclusively targeted at exempt investors who are experienced, knowledgeable and sophisticated enough to sufficiently understand the risks involved, and who are able to make their own decisions about the suitability of those investment opportunities. All investors should seek independent professional investment and tax advice before deciding to invest. Any historic performance of investment opportunities is NOT a guide or guarantee of future performance and any projections of future performance are not guaranteed. All investment opportunities available via Acorn Property Invest are NOT regulated by the Financial Conduct Authority (FCA) and you will NOT have access to the Financial Services Compensation Scheme (FSCS) and may not have access to the Financial Ombudsman Service (FOS).