A clear majority of buy-to-let mortgage brokers are anticipating a reduction in the Bank of England base rate this week, according to the latest research from specialist lender Landbay.
In a survey of 119 mortgage intermediaries conducted by the lender, 71% said they expect a rate cut when the Monetary Policy Committee announces its decision on 8 May. Most notably, 61% of brokers forecast a 0.25 percentage point reduction in the base rate, while 11% are predicting a more aggressive cut of 0.5 percentage points. Around 27% believe the Bank will hold the rate steady at 5.25%, and just 2% expect a further rise.
Rob Stanton, sales and distribution director at Landbay, said the results reflected “a cautious optimism among brokers and an expectation of a gradual easing of monetary policy.” He added: “While 61% think we’ll see rates fall [by] 0.25 percentage points, a bullish 11% think we’ll see a 0.5 percentage point cut. That aligns with market expectations. A significant number of brokers expect no change, or even a rise, which highlights some ongoing uncertainty in the market, driven, most probably, by persistent concerns over inflation.”
Financial markets appear to share the view that a cut is imminent. According to data from LSEG, traders have priced in a 100% probability that the Bank of England will lower the base rate to 5% this month. Earlier forecasts had suggested an 82% chance of a reduction, but that shifted following comments from Megan Greene, a member of the Bank’s rate-setting committee, who said that the impact of US trade tariffs would likely be deflationary for the UK economy. Her remarks appear to have cemented expectations of a shift in monetary policy.
MARKET EXPECTATIONS
The LSEG data further suggests that markets are anticipating a total of three base rate cuts before the end of 2025.
Landbay’s latest findings follow a previous poll conducted during a webinar in February, when the lender asked 105 mortgage brokers how many more rate cuts they expected this year. A slim majority (54%) predicted two further cuts by the end of 2025. Only 14% believed there would be three additional cuts, while 26% said they expected just one more reduction. A small minority of 4% said they thought rates would remain unchanged at 4.5%, and only 2% forecast a drop as far as 3.5%.
Stanton noted that the prevailing sentiment among brokers presents opportunities for landlords and investors. “While brokers are clearly trying to navigate a complex economic landscape, expectations of a potential base rate cut in May present opportunities for landlords and property investors keen to expand their portfolio,” he said.
The Bank of England has been under pressure to begin unwinding its tightening cycle amid slowing inflation and ongoing concerns over the strength of the UK housing market. Any move to lower the cost of borrowing would likely be welcomed by property investors, many of whom have seen their margins eroded in recent months due to higher mortgage rates.
The base rate has stood at 5.25% since August 2023. Should the Monetary Policy Committee vote to reduce it this week, it would mark the first cut since the central bank began raising rates in December 2021.
