Interest Rate Cut: What It Means for Scotland’s Property Market

The Bank of England’s latest interest rate cut to 4% could offer a welcome lift to the Scottish property market. This article from Wallace Quinn explains what the reduction means for buyers, sellers, and mortgage holders, with insights on how to make the most of current conditions.

In early August 2025, the Bank of England cut the base rate to 4%, its lowest level in over two years. While modest, the decision arrives at a critical time for Scotland’s housing market, mortgage borrowers, and those preparing to move home. In this article, Wallace Quinn examines the implications for clients across Glasgow, Livingston, and Bathgate, from first-time buyers to homeowners nearing the end of fixed deals.

On 7 August 2025, the Bank of England announced a 0.25% cut to the base rate, dropping it from 4.25% to 4%. The move was far from unanimous, with committee members split on whether to hold steady or reduce rates further.

Why the split? While inflation remains stubbornly above the Bank’s 2% target, signs of economic fragility, slowing wage growth, weakening employment, and subdued consumer activity have helped tip the balance. As a result, we now have the lowest base rate since March 2023.

Even a modest cut can improve buyer confidence, and we’re already seeing signs of that in the market.

• According to Zoopla, buyer demand is up 11% on this time last year.
• Sales agreed have risen by 8%.
• The number of homes coming to market is at a seven-year high.

Improved affordability, aided by both lower rates and relaxed lending stress tests, means some buyers can now borrow up to 20% more than they could a year ago. For sellers, that opens the door to a larger pool of motivated buyers.

If you’re thinking of moving, now may be the time to reassess your position, particularly if you’re relying on a mortgage.

For clients on tracker mortgages, the impact is immediate. Your monthly repayments will fall in line with the new base rate. With around 600,000 tracker mortgages active in the UK, many homeowners will feel the benefit right away.

Standard variable rate (SVR) mortgage holders may also see savings, although these are not always passed on automatically. If you’re on an SVR, it’s worth checking in with your lender. On an average SVR mortgage of £250,000 over 25 years, monthly payments could fall by around £40, according to Moneyfacts.

If your fixed-rate mortgage is due to expire, you may be feeling anxious, but the outlook is slowly improving.

While we’re not seeing dramatic reductions in fixed rates, lenders are becoming more competitive and rates are stabilising. One homeowner featured by the BBC saw their new deal land at 3.8%, up from 1.8%, but far better than anticipated.

The key is to shop around. A qualified mortgage broker or solicitor can help you assess your options and act quickly when a suitable rate becomes available.

It’s difficult to say. The August vote was finely balanced, and the Bank has made clear that further changes will be gradual. Inflation is forecast to peak at 4% in September, and cost pressures from wages and food remain high.

Nonetheless, the overall direction appears to be downward. For now, stability is returning, and that’s no bad thing for anyone planning a move.

Scotland’s property market continues to perform well in relative terms. Affordability remains better here than in many parts of the UK, and local demand has stayed resilient.

The interest rate cut is likely to support continued growth, giving more buyers the confidence to act. Whether you’re moving up the ladder, downsizing, or purchasing your first home, now is an ideal time to speak with a solicitor and get your plans in motion.

At Wallace Quinn, we’ve been helping clients buy and sell property across Scotland since 1990. With offices in Glasgow, Livingston and Bathgate (as The Conveyancing Practice), we combine local knowledge with personal, straightforward legal advice.

We understand the importance of timing in the property market. Whether you’re securing a mortgage, making an offer, or concluding missives, our experienced team is here to help you every step of the way.

If you’d like to understand how this interest rate cut affects your situation, or you’re ready to take the next step, please speak with your mortgage advisor who will be happy to talk this through with you. Don’t have one? No problem! Please let us know, we’d be happy to put you in touch with one. We’re here to help make your move a success.