The Bank of England has unsurprisingly voted to leave UK interest rates on hold at 4%.
Following its latest meeting, the Bank’s monetary policy committee opted to leave borrowing costs unchanged.
The MPC held rates a day after UK inflation was recorded at 3.8%, almost double the Bank’s 2% target, despite signs that the jobs market is cooling.
Industry response:
Simon Capp, head of residential sales: “Given the wider economic chatter in the lead up to the autumn budget and current inflation rates, it is unsurprising to see the Bank of England hold interest rates today. The property market is heading into a typically more buoyant autumn period and while a further reduction in rates would have helped mortgage affordability, we are still seeing plenty of interest from motivated and well-capitalised buyers.”
Matthew Thompson, head of sales at Chestertons: “Higher inflation has made a rate cut very unlikely today, leaving many house hunters frustrated. There are speculations over interest rate reductions later this year but with uncertainty over what will be announced in November’s Autumn Budget, it’s far from guaranteed. Despite this, mortgage products are at an 18-month low which a lot of buyers are currently taking advantage of.”
Nathan Emerson, CEO of Propertymark: “Throughout the world, many central banks have faced considerable pressure to reduce interest rates, and the UK has been no exception. The Bank of England remains in a challenging position to achieve long-term economic growth and not risk disrupting the progress already made.
“Today’s freezing of interest rates will give perspective to current homeowners and provide reassurance to those looking to take a new mortgage product, that costs will generally remain steady for the time being.
“Ultimately, it would be good to see base rates track downwards. However, it remains positive that we have seen an overall reduction since the start of the year, which has assisted in generating greater affordability for many.”
Matt Smith, Rightmove’s mortgage commentator: “A Base Rate hold today had looked fairly nailed on, especially after yesterday’s news that inflation remains stuck at 3.8%. The later-than-usual Budget is very much on the horizon, and the markets are having to wait until the end of November for answers to the questions that are driving a lot of the current uncertainty. So, it’s not surprising we’ve seen market expectations for the next Base Rate cut shift from late 2025, into early 2026.
“We’ve seen average rates drift up recently, and with today’s decision unlikely to relieve the pressure lenders are feeling, we could see rates continue to rise in the coming weeks. This time last year, we saw a jump in activity as the Bank cut the Base Rate for the first time in four years. Our data shows that sales agreed are currently +3% higher than they were during this busy period, signalling that, for now, mortgage rate increases are not putting off those looking to move home.”
Stephanie Daley, director of partnerships at Alexander Hall: “Today’s hold to the base rate was widely anticipated and this has already been reflected by many lenders with respect to their current product offering.
“The good news is that previous rate cuts have already brought about a greater degree of confidence amongst lenders and buyers and, as a result, we’ve seen a greater range of mortgage products introduced in recent months to help drive market activity – from lower deposit offerings to higher loan to income multiples.
“So whilst a hold might not be the decision many wanted to see, the market remains in a very good position going into the last quarter of the year.”
Guy Gittins, CEO of Foxtons: “The decision to hold the base rate comes as no surprise given the fact that inflation remains stubbornly higher than the Bank of England would like.
“Of course, it remains very much a case of the tortoise, not the hare, where the current market trajectory is concerned and this is likely to continue in the lead up to the Autumn Budget, as many buyers adopt a wait and see mentality in hope of further stamp duty reforms.
“Whether or not this materialises remains to be seen, however, we anticipate a surge in market activity in the weeks that follow, with a particularly busy run-up to Christmas as pent up demand is released.”
Shepherd Ncube, CEO of Springbok Properties: “Today’s decision to hold the base rate will do little to boost a housing market that has been stagnating for some time, particularly at higher price thresholds.
“The current reality is that the market is suffering from a high level of over-supply and there simply isn’t a sufficient number of buyers acting with conviction. This has resulted in sellers having to slash asking prices in hopes of enticing an offer and, even when they are successful, we’re seeing a great deal of transactions fall through.
“This is leaving many sellers understandably frustrated and whilst we would usually see a surge in activity in the run up to Christmas, this year, the chances of completing before the turkey hits the table are very slim indeed.”
Verona Frankish, CEO of Yopa: “Today’s rate hold will bring stability to the property market but it won’t help to ignite buyer activity which has remained subdued of late. This could result in a far longer winter than many home sellers may have liked, with the chances of Santa leaving a sale completion under the tree this December looking far slimmer.
“The positive is that the market is still standing strong and whilst we may see a lack of urgency from buyers with respect to making their move before Christmas, the long-term picture is one of continued house price growth and a steady and stable level of transactions.
“As a result, committed buyers and sellers should have no trouble in finding common ground before the year is out.”
Marc von Grundherr, director of Benham and Reeves: “The decision to leave the base rate unchanged will see the property market remain in a holding pattern for the foreseeable future, particularly with the Autumn Budget looming.
“This isn’t necessarily a bad thing given that the current market landscape is one of overarching positivity, driven by greater certainty and more measured house price growth, with both buyers and sellers benefitting as a result.
“There’s currently an abundance of stock on the market providing buyers with greater choice, the mortgage market is ripe with a range of more favourable products compared to previous years and house prices are climbing but not at extraordinary rates.
“All in all, the outlook is positive and there’s little to suggest this will change, even with wider economic headwinds caused by sticky inflation and flat GDP growth.”
Colby Short, co-founder and CEO of GetAgent: “Today’s decision will come as no surprise and while no news is technically good news, it will do little to move the dial for the property market.
“This means we continue on a path of resilience rather than rapid growth and with inflation remaining well above target, wage growth softening and GDP flatlining, this could remain the case for some time.
“The real driver of activity in recent months has been the improving mortgage landscape, with lenders easing affordability and broadening product choice. Until the Bank takes firmer steps on inflation, that lender-led momentum will remain the key factor keeping the market moving.”
Simon Gammon, managing partner at Knight Frank Finance: “The Bank of England’s decision to hold the base rate at 4% today comes amid growing consensus that we’re at, or near, the peak of this cycle. Markets have all but ruled out further rate reductions before the end of the year. HSBC and Deutsche Bank have pushed back their forecasts for the next cut, citing persistent inflation and economic uncertainty.
“Inflation remains stuck at 3.8%, well above the Bank’s 2% target, meaning the MPC is rightly cautious. Having already trimmed rates in August, it appears the Committee is waiting for more convincing evidence that inflation is easing consistently before moving again.
“In terms of mortgages, that suggests fixed-rate products may see less downward pressure than many hoped. Lenders will likely stay cautious, pricing in the risk that rates might stay higher for longer. Variable-rate borrowers may see little immediate change, with stability rather than relief the likely theme for the months ahead.”
“Today’s decision to maintain the status quo provides welcome stability for borrowers, particularly those on tracker products who won’t see immediate changes to their monthly payments. It also maintains a favourable environment for secured loans, allowing customers to access competitive rates without disturbing their existing mortgage arrangements.
“This steady approach from the Bank of England reinforces the value of second charge lending for homeowners looking to fund major life events or consolidate debt without adding exponentially to their monthly outgoings. In fact, customers who consolidate debts with a secured loan could reduce their outgoings by at least £600* on average.
“With the second charge market seeing strong growth over the past year, on track to reach £2bn of lending in 2025, it’s clear that more consumers are recognising the benefits. But there’s still work to do to ensure all homeowners are aware of the options available to them when managing their finances.”
