The Bank of England (BoE) has announced it will reduce the Base Rate to 4% this month ( 7.8.25) a reduction of 0.25% - the third this year.
Over the past twelve months, the property market has been shaped by one factor more than any other: interest rates. Rising costs of borrowing have influenced buyer confidence, affected affordability, and in many cases slowed transactions. However, after a prolonged period of increases, the tide is finally turning. Rates have begun to ease, and while the reductions are cautious rather than dramatic, they are providing much-needed relief for homeowners and prospective buyers alike.
This change marks a shift in tone. Where once the conversation was dominated by concerns over escalating monthly repayments and tightening affordability, today we are starting to see renewed optimism. But what do these changes really mean, both now and over the next two years?
A YEAR OF TRANSITION
Over the last year, central banks gradually adjusted their approach. Having raised rates to combat inflation, they are now adopting a more balanced stance. Inflation has cooled from its peaks, and with that cooling comes the ability to soften the burden on households.
As a result, mortgage rates have edged downwards. This does not mean a return to the ultra-low levels of the early 2020s, when borrowing costs dipped to historic lows. Instead, what we are seeing is a move away from the painful highs of 2022 and 2023, towards a more sustainable middle ground.
For homeowners, the effect is tangible. Monthly repayments for those remortgaging today are already more manageable than they were even six months ago. For buyers, lenders are showing slightly greater flexibility, meaning mortgage approvals are becoming a touch more accessible.
Locally, this has translated into renewed movement in areas such as the general Sutton Coldfield and suburbs areas asl well as Great Barr, where family homes are once again drawing stronger levels of enquiry. Similarly, Four Oaks and Little Aston have seen renewed interest from upsizers, with larger detached properties becoming more attainable as borrowing costs ease.
WHAT DOES THIS MEAN FOR AFFORDABILITY?
The direct impact of falling interest rates is improved affordability. For example:
A £250,000 mortgage rate a couple of years ago 6% over 25 years equates to a monthly repayment of around £1,610.
Reduce that rate to 4% and the repayment drops to around £1,320.
That £290 saving per month adds up to nearly £3,500 per year – a game-changer for many households.
You can check the current average mortgage rates for different terms and deposit sizes here.
For first-time buyers in particular, this shift can make the difference between passing or failing a lender’s affordability check. For families looking to upsize, the improved figures bring larger homes within reach.
THE OUTLOOK FOR THE NEXT TWO YEARS
Analysts broadly agree that we are unlikely to see a return to the aggressive rate hikes of the past couple of years. Central banks are expected to take a cautious path, keeping rates at sustainable levels while monitoring inflation.
What this suggests is a period of relative stability. Rates may fluctuate within a narrow band, but the overall trend is expected to be flat to gently downward. This stability is crucial for the housing market, where confidence depends on predictability.
For buyers, the next two years represent an opportunity to secure finance with greater certainty. For sellers, a more confident buyer pool should translate into stronger demand and quicker transactions. For investors, stability offers reassurance, making property once again an attractive option compared to more volatile investments.
Here in Sutton Coldfield, stability also means consistency in demand. Popular family areas such as Walmley, Wylde Green, and Boldmere are expected to remain resilient, with properties well-placed to attract buyers who had previously been hesitant.
If you’re thinking of moving home soon, a good way to find out how much you could borrow is to use our mortgage calculator. You can get a personalised result by applying for a Mortgage in Principle This email address is being protected from spambots. You need JavaScript enabled to view it. , which will take you one step closer to a mortgage offer.
BUYER CONFIDENCE RETURNING
One of the most significant impacts of lower rates is psychological. During the peak of rising rates, many buyers chose to sit on the sidelines, uncertain of where the market was heading. Now, with the tide turning, those same buyers are returning.
Agents are already reporting more enquiries from first-time buyers who had paused their plans, as well as from upsizers who were waiting for conditions to improve. The sense that “the worst is behind us” is powerful in restoring momentum to the market.
In practical terms, this means more viewings, more offers, and more successful sales being agreed. For example, over recent weeks we have seen renewed demand for starter homes in Erdington and Kingstanding, as well as steady interest in executive homes across Four Oaks and Streetly. You can read more about how lenders calculate affordability for mortgages here.
SELLERS: A TIMELY OPPORTUNITY
For sellers, the current environment presents a valuable window. A more confident buyer pool means more viewings, stronger offers, and ultimately a higher chance of achieving a successful sale.
INVESTORS AND LANDLORDS
The easing of interest rates also has implications for the buy-to-let sector. Many landlords felt the squeeze during the period of rising rates, with higher mortgage costs eroding yields. Now, with borrowing costs softening, yields are beginning to recover.
For investors considering expanding their portfolios, the coming period could be an attractive entry point. Rental demand remains high, particularly in commuter-friendly areas such as Great Barr and Erdington, and with financing stabilising, the numbers are starting to stack up once again.
LONG-TERM PERSPECTIVE
While today’s interest rates are lower than recent highs, they remain above the record lows of a few years ago. This is an important point for both buyers and sellers.
The era of ultra-cheap borrowing may be behind us, but what we are seeing now is a new normal – one that is sustainable, balanced, and less vulnerable to shocks. In many ways, this is healthier for the property market, as it avoids the distortions created by artificially low rates while still keeping borrowing affordable.
IN SUMMARY
Looking ahead, stability is expected to be the theme of the next two years. For anyone considering a move – whether buying, selling, or investing – now may well be the right time to act.
At Acres, we are already seeing the benefits of renewed confidence across Sutton Coldfield, Four Oaks, Walmley, Boldmere, and Great Barr. If you are thinking about making your move, our team would be delighted to guide you through the process — whether that means arranging a free market valuation, discussing mortgage options, or helping you find your next home.
Please note: Acres Estate Agents are not authorised to give financial advice; the information and opinions provided in these articles are not intended to be financial advice and should not be relied upon when making financial decisions. Please seek advice from our specialist mortgage division https://acres-fs.co.uk/contact .
Want more tips and advice? We love being able to help! Acres Estate Agents are your local, family owned and run property experts for the Sutton Coldfield and Great Barr areas. Call your local office on the numbers below or email This email address is being protected from spambots. You need JavaScript enabled to view it. to find out how we can help you.
Want to check how much your home is worth? You can get an Instant Valuation here.
If you would like to discuss selling your home, please get in touch with us This email address is being protected from spambots. You need JavaScript enabled to view it. or call any of our busy, helpful teams/offices:
Four Oaks 0121 323 3088
Sutton Coldfield 0121 321 2101
Walmley 0121 313 2888
Great Barr 0121 358 6222
Lettings 0121 312 4997
Mortgages 0121 387 1616
Thank you for reading this article, and your interest in Acres and our property for sale.
Nigel & Jayne Deekes – Acres Partners
