Bank of England holds interest rates at 3.75%
The Bank of England has announced its decision to hold the base rate at 3.75%.
This decision comes as a result of wider economic uncertainty and an emerging energy crisis due to the Iran conflict, as well as inflation (CPI) sitting at 3.0% and remaining above the Bank’s 2.0% target.
Today’s decision reflects continued caution from policymakers, with the Bank opting to maintain stability for now while monitoring and assessing inflationary pressures in the coming months.
Here are some thoughts from the Industry.
Kevin Shaw, National Sales Managing Director, LRG:
The Bank of England sitting on its hands today will not come as any great surprise. Only a few weeks ago, a cut looked quite likely, but the renewed instability in the Middle East and the inflationary shadow cast by higher oil prices have clearly made Threadneedle Street a little more cautious.
That said, the housing market has so far shown a fairly British talent for keeping calm and carrying on. We are not seeing the conflict translate into any meaningful slowdown in agreed sales or new listings, and our application levels from would-be buyers are up 9% on 2025. For all the noise around inflation and geopolitics, plenty of people still want to move and, crucially, are willing to get deals done. The market remains price sensitive, as it has for the past two years, but demand is clearly present.
I view new sales agreed as the “canary in the coalmine” – they are usually the first thing to drop off if confidence really starts to crack. So far, that canary is still singing.
Of course, a rate cut would have been welcome. Buyers always prefer a tailwind to a headwind. But one hold does not redraw the map. With six MPC meetings still to come this year, there is still every chance of rates easing later in 2026, and a move on 30 April would be warmly received.
In the meantime, the property market looks less rattled than some of the commentary around it. The Bank may have delayed its long term objective of reducing interest rates, but from our perspective buyers and sellers are not delaying in their willingness to transact.
Daniel Austin, CEO and co-founder at ASK Partners, said:
“The Bank of England’s decision to hold rates at 3.75% reinforces the ‘higher for longer’ reality facing households and property markets. While policymakers continue to signal potential cuts later this year, the recent uptick in inflation and renewed geopolitical tensions in the Middle East underline just how uncertain the path back to target remains. Any escalation that pushes up energy prices or market volatility could easily complicate the disinflation story, leaving confidence fragile among buyers and developers alike. Mortgage pricing has improved and further easing would be welcome, but it will take time for meaningful relief to filter through to household finances and borrowing costs.
“In the meantime, mainstream housing activity is likely to remain subdued, with capital continuing to favour structurally resilient, income-led sectors such as build-to-rent, co-living, logistics, storage and data centres, where persistent undersupply continues to support demand. A clearer downward trajectory for inflation, alongside rates moving sustainably lower, would be the real catalyst for unlocking stalled projects. Until then, disciplined, income-focused and lower-leverage strategies offer investors a pragmatic way to stay active while managing risk in an increasingly uncertain macro environment.”
Nathan Emerson, CEO of Propertymark, comments:
“The decision to keep base rates on hold provides a welcome sense of stability for the property market. Mortgage repayments remain predictable, which is critical for households balancing cost-of-living pressures. Stability in interest rates can support continued buyer confidence and property transactions, particularly in a market already facing supply constraints and rising house prices. For sellers and landlords, this environment allows for measured planning, while buyers can explore financing options without the immediate concern of rising borrowing costs.”
Richard Merrett, Managing Director of Alexander Hall, commented:
“Recent developments in the Middle East have already been reflected within the mortgage market, with swap rates edging up and some lenders reducing product availability as they respond to short-term market movements.
Against that backdrop, today’s decision to hold the base rate should provide reassurance for borrowers that the broader outlook remains one of stability. While the market has adjusted in response to recent movements, the medium-term picture for borrowing costs is still far more predictable than it was a year ago.
It’s also important to keep these changes in context. Although swap rates have increased in response to the latest global developments, they remain lower than they were this time last year.
So while there has been some upward movement in recent weeks, the mortgage landscape is still operating from a more stable and favourable position than borrowers were facing twelve months ago.”
CEO of Foxtons, Guy Gittins, commented:
“Today’s decision from the Bank of England was largely expected given the market movements we’ve seen in recent weeks following developments in the Middle East.
So far this year, we’ve seen steady growth in both house prices and supply. We expect this to continue against the backdrop of a more stable and favourable position for borrowers when compared to twelve months ago, despite recent market adjustments.”
Jonathan Samuels, CEO of specialist lender, Octane Capital, commented:
“Today’s decision to hold the base rate reflects a more cautious stance from the Bank of England but one that is to be expected given recent developments in the Middle East, which have already filtered through into swap rates and lender pricing.
However, while swap rates have climbed in the short term in response to these events, they remain notably lower than they were this time last year, and by a wider margin than the increase seen since the start of the Iran conflict.
As a result, the underlying outlook remains far more stable than it was a year ago, and holding the base rate should help lenders maintain confidence in their pricing, ensuring borrowers continue to benefit from a competitive and accessible mortgage market.”
Damien Jefferies, Founder of Jefferies London, commented:
“Today’s decision to hold the base rate will be viewed as a measured response to recent global developments, which have influenced sentiment across financial markets quite considerably in recent weeks.
For international and high-net-worth buyers, consistency in monetary policy is key, so today’s decision to hold the base rate will provide some stability in this respect.
London remains a highly attractive destination for global property investment, and in times of wider global change, we often see an increased appetite from overseas buyers looking to secure assets within established, transparent markets such as the UK.”
Verona Frankish, CEO of Yopa, commented:
“Today’s decision to hold the base rate is unlikely to come as a surprise, however, the important point is that the UK property market remains in a far stronger position than it was this time last year, despite increased instability on the global stage.
Buyer confidence has improved, borrowing conditions have become more predictable, and a steady base rate will only help provide the certainty many domestic buyers need to move forward with confidence.”
Director of Benham and Reeves, Marc von Grundherr, commented:
“Today’s decision to hold the base rate should help reinforce growing confidence across the domestic property sector, which has continued to perform well so far this year, with strong levels of buyer activity and steady transaction volumes being seen.”
Sarah Thompson, Group Financial Services Director, Mortgage Scout, part of LRG
“Today’s decision to hold the base rate reflects a market that has been moving in the right direction, but is still adjusting to ongoing global uncertainty. While recent headlines have focused on mortgage rates edging upwards, the reality is that these movements remain relatively modest and far from the sharp increases seen in previous years.
“What we are seeing in practice is a clear shift in borrower behaviour. There is a greater sense of urgency, particularly among those approaching remortgage, as customers look to secure a rate and bring forward decisions they may have otherwise delayed. That is being driven as much by confidence and sentiment as it is by the actual cost of borrowing.
“Importantly, affordability remains the key consideration. For most borrowers, recent rate changes equate to manageable differences in monthly payments, rather than a fundamental barrier to moving or refinancing. Lenders continue to have a strong appetite to lend, and there are still competitive products available across the market.
“In a more changeable environment, preparation is everything. Speaking to a broker, understanding your options and securing a rate early puts you in control, with the flexibility to review again if conditions improve before completion. Ultimately, it is about focusing on what you can afford and making informed decisions, rather than reacting to short-term headlines.”
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