A LEADING North Yorkshire-based developer has warmly welcomed the Bank of England’s promise that interest rates will be cut more aggressively if price rises remain under control.

Paul Brown, the managing director of Vivly Living, said the comments by the bank’s governor Andrew Bailey, will provide the embattled UK housing market with much-needed hope.

The bank cut interest rates from 5.25 per cent to 5 per cent in August, which was the first drop in more than four years.

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Mr Bailey also said that the bank was watching developments in the Middle East "extremely closely", in particular any movement in oil prices that could fuel inflation. The Bank of England has two more meetings left this year to decide on interest rates, in November and December.

At the Bank's last gathering in September, Mr Bailey was optimistic that borrowing costs would continue to fall. But he said at the time it was "vital" inflation remained low.

Paul Brown lives in Easingwold and was the former managing director of Caedmon Homes, who built sold-out residential developments in York, Whitby and Kirby Hill, near Boroughbridge.

Meanwhile Vivly Living, formerly Yorkshire Country Properties, is currently on site with three West Yorkshire developments in the villages of Shepley, Skelmanthorpe and Denby Dale.

Inside a Caedmon homeInside a Caedmon home (Image: Supplied) Paul Brown said: “Andrew Bailey’s positive and upbeat comments should provide confidence boost to the housing market in Yorkshire and across the UK. Despite headline inflation falling, the bank had remained cautious about making a decision too soon that could reignite inflationary pressure. The time has now come to be braver, with inflation under control.

“For homeowners and those who’ve been looking to get on the property ladder, the past few years have been tough, but there are signs of it changing. Rates on mortgage deals have been falling, and given Mr Bailey’s assessment of the country’s finances, I’m very hopeful that more cuts will follow.

“With a new government in power that is committed to delivering near two million new homes, the Bank of England’s positivity could be a real turning point for homeowners and those who aspire to buy.

“We’ve already seen monthly mortgage approvals sitting at consistently high levels as this pent-up demand across the market earlier this year has been released and, with interest rates potentially falling further, there are genuine grounds for optimism in the residential property market.”

The Bank of England raised interest rates steadily from the end of 2021 as inflation surged, partly due to the increase in energy prices following Russia's invasion of Ukraine. However, now that inflation is currently close to the bank's two per cent target, attention has focused on how many rate cuts will be made.

Many analysts expect the bank to reduce rates at its meeting in November. However, following Mr Bailey’s recent upbeat comments, expectations increased of a rate cut in December as well.