Expert explains what an interest rate cut means for UK property buyers, landlords, & investors

A leading property expert says affordability will be boosted by last week’s interest rate cuts – but warned supply is still a major factor in the market.

Mish Liyanage, CEO of The Mistoria Group, was commenting in the wake of the Bank of England’s decision to slash rates.

He said: “With mortgage rates easing, we can expect a marked boost in affordability, particularly for first-time buyers who have been sidelined by recent rate hikes. However, it’s crucial to recognise that supply constraints remain a critical barrier, and without more homes entering the market, price pressure will persist.”

Building on this, Mr Liyanage has shared his expert perspective on what the rate cut could mean for UK property buyers, landlords, and investors:

“A reduction in interest rates usually boosts affordability,” he said. “We often see increased buyer demand in cities like Manchester, Salford, and Liverpool, where the potential for capital appreciation and rental growth remains strong.

“While an interest rate reduction may ease mortgage stress, the market is still heavily constrained by supply shortages.”

Latest government data shows that in 2024, England saw approximately 124,000 new homes built – 30% below the government’s annual target of 300,000. This shortfall is most acute in high-growth areas, pushing prices and rents upward.

Mr Liyanage says landlords could see improved profitability with falling borrowing costs, especially those operating via limited companies, which now account for over 70% of new buy-to-let purchases.

“These company structures let investors keep full mortgage interest relief and make portfolio expansion easier,” says Mr Liyanage.

Yet, he stresses that optimism is tempered by forthcoming regulatory changes. The Renters’ Rights Bill will introduce periodic tenancies, a national landlord register, stronger tenant protections, and stricter eviction controls.

“Landlords need to prepare for increased compliance requirements in addition to better financing conditions,” Mr Liyanage advises.

Despite the rate cut, Mr Liyanage urges property investors not to expect uniform market gains.

He said: “Demand is recovering fastest in northern cities and university towns, while regions with weaker employment or aging housing stock still lag.

“Savvy landlords focus on cities with strong student populations, new infrastructure, and robust local economies, places where rental yields regularly exceed 7–8%” he says.

Here Mr Liyanage shares his five tips for best navigating the market

1. Act Early– Take advantage of the months immediately following the rate cut, before heightened demand drives prices higher. Post‑cut periods historically see increased competition and faster sales.
2. Work With Experienced Local Agents– They offer granular market knowledge, access to off‑market opportunities and expertise in navigating local regulations. Well directed investments are more likely to achieve strong yields and reduce vacancy risks.
3. Prioritise Compliance– Avoid fines of up to £30,000, rent repayment orders, or loss of licence by meeting all safety, licensing and tenancy obligations early – especially for HMOs.
4. Consider a Limited Company Structure– This preserves full mortgage interest relief as a deductible business expense, improves post‑tax returns and supports portfolio growth -advantages private ownership can’t match.
5. Track Supply and Demand Data– Monitor government housing statistics, planning approvals, vacancy rates, rental yields and infrastructure projects. Target areas with housing shortages, strong employment and growing populations for the best long‑term returns.