The Bank of England has kept the base rate at 3.75%, as expected, but the backdrop to this decision has shifted sharply. Renewed geopolitical tensions, rising oil prices and the knock-on impact on inflation have made the outlook for interest rates far less predictable than it looked just a few weeks ago.
While a hold offers some short-term stability for borrowers, lenders have already started adjusting pricing in response to market volatility, and expectations for rate cuts have been pushed further out. With borrowing costs still elevated and the cost-of-living pressures ongoing, the path ahead remains uncertain. So what does this mean for affordability, buyer demand and mortgage strategy? We’ve rounded up reaction from across the mortgage and property sector on where the market goes next:
Matt Harrison, customer success director at Finova Broker, said:
“The Monetary Policy Committee’s cautious approach continues with today’s decision, but this is the calm before the storm. Many high street lenders are already repricing deals and inflation is looking menacing. Borrowers not switched on to changing rates won’t take long to realise the tide is now turning against them, especially those remortgaging from pandemic-era deals.
What was already set to be a busy year for brokers, just gained even more traction. Efficiency will be the key to keeping abreast of changing deals and moving fast to lock in rates for clients.”
Ben Thompson, Director of Home Moving Strategy, Mortgage Advice Bureau:
“Few will be surprised that The Bank of England has held the base rate at 3.75%.
With energy price pressures and ongoing geopolitical tensions creating uncertainty, the bank will want clearer evidence that inflation is moving sustainably back towards its 2% target before making any further moves.
These external pressures could mean the first cuts take longer to arrive than many had hoped. Rate movements can feel unsettling, but mortgage markets often price in expectations well in advance, meaning the impact on new deals may be less significant than many fear.
For homebuyers and current homeowners, the key message is not to panic. Focus on understanding your options rather than rushing into decisions, particularly in this fast-moving market.
If you’re within six months of your current mortgage deal ending, it’s worth locking in a new rate now. Many lenders allow you to secure a deal in advance and switch if rates fall, offering a useful ‘insurance policy’ against ongoing uncertainty.
For those trying to understand what current rates mean for their finances and affordability, using online mortgage calculators to estimate potential monthly repayments can be a helpful starting point.
Above all, in a market that’s constantly evolving, speaking to a mortgage expert is invaluable. They can help you understand your options, what they mean for your budget, and make sure you’re on the most suitable deal for your circumstances.”
Colin Bradshaw, CEO at TwentyCi, says:
“The Bank of England’s decision to maintain the base rate at its current level was widely expected and reflects a cautious strategy in the current uncertain climate. The ongoing volatility in the Middle East has undoubtedly added a layer of complexity and the Bank is likely wary of cutting too soon and risking an inflationary rebound that could undo the progress made over the last year.
While buyer demand remains resilient, the lack of a downward move does not increase the affordability needed to unlock the next level of transaction volumes. We expect the market to remain stable, but the anticipated spring surge may be more of a steady trickle until the path to lower rates becomes clearer.”
John Phillips, CEO of Just Mortgages and Spicerhaart, said:
“It’s a relief to see the MPC sit on its hands at its first meeting since the Middle East conflict. Speaking with industry colleagues, there was certainly a worry that we would see the central bank react with a rate rise. That said, it’s hard to predict where we go from here and what the future path of interest rates now looks like. So much depends on how drawn out this conflict becomes and the impact it has on prices and inflation more broadly. We shouldn’t rule out the prospect of increases in the future.
It has certainly sent shockwaves through the mortgage market and forced many lenders to quickly remove and re-price products. As a result, we have seen around a 20% increase in remortgage business over the last week or so as clients looked to secure rates before they were pulled. Brokers have been putting in the hard graft and working late to ensure applications are submitted and rates are secured. Beyond that, we haven’t seen a real drop off in buyer registrations, valuation requests or mortgage appointments, signalling that the wider turmoil and uncertainty hasn’t yet filtered through to all buyers and movers. People are still getting on with the task at hand and are seeking expert advice to do so.
It’s a real example of where advisers prove their value. As clients continue to navigate a volatile market in the coming days, weeks and months, it’s crucial that we remind them of that value and the expertise we can offer. While rates may be shifting, all is certainly not lost – there are still plenty of opportunities out there in the market. It’s up to us to be proactive and to share our knowledge.”
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.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, says:
“There was very little chance that the Bank of England would cut interest rates this month given the Middle East conflict and concerns as to what impact this might have on inflation. MPC members voted unanimously for a hold in base rate at 3.75 per cent with the committee ‘alert to the increased risk of domestic inflationary pressures’.
Market expectations for two or three further quarter-point rate cuts this year resulted in a fall in Swap rates, which underpin the pricing of fixed-rate mortgages. Now, with market expectations that those reductions won’t happen, and a possibility that rates may even rise at some point, Swaps are extremely volatile and have edged upwards again.
Mortgage repricing has happened in stages, initially in response to the increase in cost of funds and recently as a result of service preservation. The ‘big six’ lenders have attempted to reprice away from the top of the ‘best buys’ but no sooner do they do so, then the next in the table does the same and so on.
While this hold is disappointing for borrowers with variable or tracker-rate mortgages who would have seen a further drop in their monthly payments if it was a cut, those on existing fixed-rate mortgages won’t see any change.
Borrowers should take action and secure a rate now if they will need a mortgage in the next six months. If the situation improves, you should be able to swap to a cheaper rate. If they continue to rise, you will be relieved that you acted when you did.”
James Nightingall of property search service HomeFinder AI:
“The property market could face a potential slowdown in buyer activity amid stagnant interest rates and recently increased mortgage costs. Cash buyers and those needing to move now for personal circumstances on the other hand, remain undeterred. As we are entering spring, buyers going ahead with their property search will benefit from a larger selection of homes to choose from as a growing number of sellers have been entering the market over the past few weeks.”
Nigel Bishop of buying agency Recoco Property Search states:
“Bearing in mind the current geopolitical climate, a rate cut would have been against all odds. Still, we expect the majority of house hunters to proceed with their property search, particularly as we enter the traditionally busy spring market.”
Adam Jennings, Head of Residential at Chestertons:
“The hold on interest rates provides reassurance for house hunters. As we enter spring, we expect buyer motivation to pick up further; especially from cash buyers who aren’t impacted by some lenders’ recent move to withdraw a number of mortgage deals.”
Tony Hall, Head of Business Development at Saffron for Intermediaries comments:
“Today’s decision will come as little surprise given the current geopolitical backdrop and the knock-on effects it is having on the UK economy. With inflationary pressures building, many lenders have been reviewing pricing and product availability carefully.
While this may temper some of the optimism seen in recent months, the mortgage market has repeatedly shown its ability to adapt to changing economic conditions. In periods like this, the role of a mortgage adviser becomes even more important, helping borrowers navigate a market where rates and product availability can shift quickly.”
Enzo Mora, CEO and founder of The Mortgage Brain:
“An interest rate cut by the Bank of England was nigh on impossible with the uncertainty of the Iran war affecting swap rates, prices and inflation. However, we’ve seen a significant increase in mortgage activity since the conflict began, from clients needing to remortgage and those purchasing, including new build buyers. Instead of prevaricating, borrowers are seizing deals at current rates, which, although have been rising, can be reserved for up to six months. There’s a strong possibility that we’ll see more competitive rates from lenders in the next month or so, as they seek to achieve 2026 lending targets or the global situation improves, and there will be a chance to switch onto these.
Many five-year fixes are now available at sub 5%, although most borrowers are choosing two-year fixes at similar rates. The expectation is that rates will start to fall again within that time frame. Borrowers coming off five-year fixes of 2-3% in the next six months will be looking at reserving rates of 4-5% now, which can then be swapped onto a lower rate if it becomes available or kept if rates have risen. The gap between different loan-to-values is small, so in many cases it’s cost-effective to borrow more now instead of waiting to accrue a bigger deposit by saving.”
Adrian Moloney, Group Lending Distribution Director, OSB Group, comments on today’s Bank of England interest rate decision:
“While some borrowers may have been hoping for the first rate cut of the year, a decision to hold reflects ongoing uncertainty in the inflation outlook, particularly given recent geopolitical tensions and pressure on energy prices, and provides a degree of stability that has been largely absent over the past couple of years.
With affordability still stretched for many households, greater clarity on the outlook for interest rates will be just as important as when and how quickly any future reductions may come. Mortgage pricing continues to respond quickly to wider market volatility, meaning borrowers and lenders alike are still navigating a changing rate environment
That means more borrowers may begin to revisit plans that were put on hold, particularly home buyers and movers who have been waiting for a more stable rate environment before committing.”
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.”
Colin Bell, Founder and COO of Perenna, said:
“With the current geopolitical uncertainty causing inflation to bare its teeth once again, the Bank has been left with no choice but to adopt a wait-and-see approach. Whatever the outcome later down the line, one thing is clear: the level of vulnerability the UK market has to uncontrollable factors needs to be addressed. Too many borrowers are still stuck in a system where they have to come back and refinance every two years, leaving them exposed whenever the market takes a turn.
A more resilient system would give people more ways to have certainty for longer, so their finances are not thrown off course every time there is a wider economic shock. There is , of course, a place for shorter mortgage products which include increased interest rate risk, but they shouldn’t be the default option. We can’t control everything, but we can take control of our own mortgages.”
Joe Pepper, CEO of PEXA UK commented:
“The consequences for the property and mortgage market are significant. We have already seen UK lenders collectively pull hundreds of mortgage products as they are forced to deal with the mounting pressures of geopolitical volatility. From homeowners looking to remortgage to those only just beginning their property search, many were hoping for a rate cut this month, so this will have an impact and stall market activity.
This is driving a sense of uncertainty in the conveyancing sector. Pipelines will freeze, chains collapse, and resource planning will become almost impossible. When rates do eventually ease, it could release a deluge of mortgage applications and transactions, putting significant strain on the UK’s conveyancing infrastructure as well as immense pressure on lenders to release funds as quickly as possible. Without more streamlined, digitally enabled workflows, the sector risks being overwhelmed by volume spikes, exacerbating the enormous stress on conveyancers and causing avoidable delays. Implementing the right infrastructure to support conveyancers as they try to manage their capacity and provide the best possible client service at a difficult time is absolutely paramount.”
Richard Pike, sales and marketing director of Phoebus Software, said:
“The Iran conflict has global implications, and the restricted supply of oil is affecting every economy in the world. Swap rates have risen on the back of inflationary fears, and lenders have been pulling rates at the fastest pace since the 2022 mini-budget.
With no clear exit plan to the Iran war and ongoing price volatility, the Bank of England had no choice but to hold rates. How long this conflict continues will determine where rates move in the future.
From a servicing perspective, product transfer rates are rising so lenders will need to manage payment shocks carefully, and there is always the concern that arrears will start to rise if affordability is affected by rising prices. On a positive note, rates are still lower than a year ago so there is hope that the market can continue to recover, albeit slowly.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, says:
“Markets were widely expecting a hold in base rate today, but the tone of the announcement is just as important as the decision itself. Stability and clear guidance will be key in reassuring both lenders and borrowers after a period of heightened volatility driven by global events.
Across the property market, while both buyers and sellers are naturally discussing the evolving situation in the Middle East, we are not currently seeing a material impact on pricing or transaction levels. Although the recent uptick in mortgage rates is unlikely to be welcomed, demand remains resilient, particularly for well-priced, high-quality homes.
Many movers delayed decisions last year amid uncertainty around the Autumn Budget and the policy direction of the Labour Party, and there is still a clear underlying need to move. As a result, for the right property, committed buyers are continuing to proceed with confidence.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says:
“Just a few weeks ago, we were speculating how soon, and by how much, the base rate would be cut at this meeting, not if it would. However, the no-change decision has come as a relief, as some had thought an increase was more likely.
The improvement in activity in the housing market seen in the early part of 2026 is still there to an extent but caution now prevails. The Bank has recognised the importance of maintaining borrowing costs to counteract the inflation wave prompted by the Middle East war, which is already hitting the economy.
In our offices, buyers who are not sellers are becoming increasingly conscious of the need to build in a contingency within calculations for higher mortgage rates as hostilities persist.”
Charles Resnick, Chief Finance Officer at Afin Bank, commented:
“Although we have already seen some fixed rate mortgage deals being pulled from the market, overall lenders are likely to remain disciplined and cautious, reflecting uncertainty over the timing of the next cut.”
Steve Cox, Chief Commercial Officer at Fleet Mortgages on today’s Bank Base Rate decision:
“A month ago, a Bank Base Rate (BBR) cut at this meeting looked almost certain, but the global picture has changed dramatically in a very short space of time. The war in Iran, the conflict in the Middle East and the wider instability it has created, particularly the sharp movements in oil prices, has understandably made the MPC far more cautious. Energy costs have a direct line into inflation expectations and, given the potential knock-on effects for the UK economy, it makes sense that the MPC has chosen to pause and give itself time to see how these events develop before taking the next step on rates.
Unfortunately, the knock-on effect of this uncertainty has been felt quite sharply in the mortgage market, including in buy-to-let. We’ve seen something of a concertina effect in recent weeks, with product withdrawals and rates edging up as lenders have needed to respond to the sharp movements in funding costs. It’s been clear that no lender is immune from this. At the moment the path to further BBR cuts looks much narrower than it did at the start of the year, and the two or three cuts many were forecasting for 2026 now feels much less certain. That said, markets can move quickly. If there were to be a relatively swift de-escalation in the Middle East, the outlook could shift again, but right now it would take a very brave call to predict that outcome, and an even braver MPC to move ahead of the evidence.”
Peter Stimson, Director of Mortgages at the lender MPowered, commented:
“A month ago the Bank of England was polishing the silverware and all but declaring its war on inflation won.
Now a real war has forced it to rewrite all its sums. The conflict in the Middle East has doubled the price of natural gas and sent oil prices soaring by more than 50%.
As a result the inflationary threat level has spiked and it is this that lies behind the Monetary Policy Committee’s unanimous vote to leave interest rates unchanged. The prospect of an imminent interest rate cut, which just a few weeks ago seemed assured, has vapourised.
With mortgage swap rates cranking upwards almost by the day, mortgage lenders have pulled hundreds of their most attractively priced products from the market.
Most lenders have repriced at least twice since the war began, and interest rates of under 4% have disappeared.
But for all the turmoil, this is not yet a repeat of the chaos that followed Liz Truss’s mini-Budget of 2022. Back then swap rates took three days to spike as far as they have in three weeks this time.
How bad things get now depends on two key questions – how long the war lasts and how embedded inflation becomes.
President Trump has no obvious exit ramp, but the absence of any clear goal in his campaign could allow him to declare ‘victory’ at any point. If he does so quickly, oil prices could settle rapidly and the inflationary shock would be limited.
But if the war drags on and high oil prices spread inflation across the wider economy, we will need to steel ourselves for the prospect of the Bank raising interest rates and more expensive mortgages.”
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.”
