The Bank of England kept rates on hold on Thursday but indicated that its first rate cut in almost three years is near, a move that would be warmly welcomed in the real estate industry.

The BoE’s Monetary Policy Committee voted 7-2 in favour of holding rates at 5.25%, their highest rate in 16 years, but said the decision was “finely balanced” for many on the committee.

That raised hopes that rates will be reduced twice this year. Bond markets are now pricing in a more than 50% probability of an August rate cut.

“The Bank of England is edging closer to a rate cut,” Bloomberg UK economist Ana Andrade said in a statement. “The lack of obvious alarm about recent inflation surprises suggests an August move is firmly on the table.”

Real estate stocks reacted positively to the news, with the FTSE 350 Real Estate Index rising 1.3% after the decision was announced, more than the 0.8% rise for the broader FTSE 350 index.

Landsec was the biggest riser, climbing 4.4%, followed by Big Yellow, which rose 2%.

The expectation is that a fall in interest rates will help real estate investment volumes and prices as the cost of debt falls and the sector looks more attractive compared to other asset classes.

All eyes will now be on July’s inflation data. Inflation has fallen to 2%, in line with the BoE’s target, but services inflation was higher than expected in June, causing the Bank to pause for thought when it came to cutting rates this month.