Mortgage brokers are only expecting two more interest rate cuts over 2025 following the release of higher-than-expected inflation data.
During a webinar, Landbay polled 105 mortgage intermediaries on their view of the interest rate situation, asking “how many 0.25 per cent base rate cuts do you now expect to see this year?”.
It found 54 per cent thought there would be two more cuts this year.
Meanwhile, only 14 per cent of those polled thought three more cuts before the end of 2025 was still realistic and 26 per cent forecasted one more cut.
A particularly pessimistic 4 per cent of brokers thought there would be no more cuts at all and that the base rate would still be 4.5 per cent at the end of the year.
However, at the other end of the spectrum, an optimistic 2 per cent of brokers said they expected the base rate to have fallen to 3.5 per cent.
Landbay sales and distribution director, Rob Stanton, said: “Brokers can’t see the future obviously, but the wisdom of crowds does give us some insight here and suggest that, when they’re talking to landlords, brokers should make it clear that the interest rate landscape has changed.
“The Bank of England is going to have to change its priorities in face of rising inflation and keep interest rates higher for longer.
“It’s well known that timing can make or break a deal in BTL, making broad product choice, easy application, and fast decision making even more valuable to both brokers and landlords in such changeable market conditions.
“No matter the path of future interest rates, this has to remain a priority for lenders.”
Landbay’s research was conducted hours after the Office for National Statistics announced inflation had increased sharply to 3 per cent on an annual basis in January, accelerating from 2.5 per cent in the previous month, a rise that topped analysts’ expectations.
Inflation is now at its highest point since March 2024 and, according to the Bank of England’s latest forecast, it is set to hit 3.7 per cent in the summer.
tom.dunstan@ft.com
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