The Bank of England’s Monetary Policy Committee (MPC) has kept UK interest rates at 4.5%, following February’s cut, in a move that was widely expected. A key factor in this decision is the recent rise in inflation to 3%, exceeding the Bank’s 2% target.
For the property sector, this decision comes at a critical time. While stability in interest rates may offer some short-term certainty for borrowers, rising costs—alongside April’s increases to employer NICs and the minimum wage—could weigh on market confidence. Many experts still anticipate further rate cuts later this year, which could impact mortgage rates, affordability, and investment in the housing market.
With the Bank forecasting inflation to rise as high as 3.7% between July and September, driven by higher costs for essentials like water, energy, and transport, property professionals must navigate an evolving landscape. As well as digesting today’s news, mortgage and property professionals will also be looking ahead to next week’s Spring Statement and what that might mean for the sector.
Today, industry experts share their insights on what this interest rate decision means for mortgage advisers, lenders, and the wider property market as follows:
Samantha Lindsay – Mortgage and Protection Adviser of My Mortgage Angel, calls on lenders for a more sustained move towards a lower borrowing rate saying: “The hold on the interest rate today was widely expected and comes as no surprise. There is still too much uncertainty in the world – between US politics, global economic instability, the heightened situation in Ukraine, a looming Budget announcement and inflation still a point away from target, lots of factors need to stabilise before further cuts are likely.
“We briefly saw the return of sub 4% mortgage rates last month, but these were just flashes in the pan. Some lenders offered these then withdrew them at short notice which just created more panic and uncertainty for borrowers. What we really need to see is lenders working together to create a more sustained move towards lower mortgage rates for all.”
Paresh Raja, CEO of Market Financial Solutions, said: “The past six months have shown that predicting base rate movements is never straightforward. The hope had long been that once inflation was brought under control, the Bank of England would rapidly reduce rates. But this was over simplistic; it overlooked the myriad other factors at play – economic and politically, domestically and internationally, the landscape is constantly evolving, and while further cuts to the base rate are still expected this year, it is likely that the central bank will remain cautious. Today’s decision reflects that.
“Where the property and mortgage markets are concerned, it is important that neither complacency nor inertia are allowed to set in. Sitting tight in the assumption that rates will tumble could prove risky. With data showing that house prices and buyer demand are on the rise, the market will clearly move ahead. So, the focus from lenders when serving brokers and borrowers has to be on delivering products and services that give clients the confidence to act in the here and now, with flexibility and optionality remaining key qualities in achieving this.”
Darrell Walker, Group Sales Director at ModaMortgages, said: “The market widely expected a hold today, and with analysts forecasting at least a 0.5% reduction in the base rate by the end of 2025, this decision is unlikely to slow activity.
“Indeed, while borrowing costs remain a challenge for some, landlords haven’t stopped investing. Instead, they are being pragmatic; they have recalibrated, adjusting both their budgets and the types of assets they are targeting. We expect this trend to continue following today’s news, and we have seen many landlords using the current period of stability to diversify their portfolios, with HMOs and MUFBs proving particularly popular.
“As ever, speculation is rife as we head into next week’s Spring Statement and, beyond that, the start of a new tax year. With this in mind, rather than focusing on when the next cut might come, lenders should prioritise agility, ensuring brokers and their clients have both the products and support they need to get deals over the line.”
Robin Rathore, CEO of Bamboo Auctions, says the stability of the hold is welcome: “Although inflation has increased slightly over the last few months, its sensible to hold rates as they are. The mortgage market appears to have already priced this into the rates on offer so we don’t expect to see any significant impact to the property market following this month’s announcement.
“The stability is welcome and we are seeing a number of great opportunities coming to market. Now is a great time to sell and the agents we work with are seeing faster transaction times with strong bids and offers being placed online by buyers across the country. As we head towards the seasonal spring bounce we expect to see more active buyers coming to the market and more sellers looking to list their properties.”
Alpa Bhakta, CEO of Butterfield Mortgages Limited, said: “While property investors were hoping for a rate cut, the economic climate and property investment outlook are in a much better position than in previous years. It’s important to remember, the upcoming Spring Budget and new tax year could influence market conditions and introduce some uncertainty. As such, it’s essential for lenders to stay proactive, supporting borrowers and brokers, to ensure the market can capitalise on its strong start to the year.”
Alan Davison, Chief Commercial Officer of Afin Bank, said:
“The Bank of England has a difficult balancing act at the moment because inflation remains high, yet economic growth has stagnated. The markets all seem to feel that more Base Rate cuts are due later in the year, but the Bank’s Monetary Policy Committee clearly wants to wait for tax rises to land and global trading conditions to calm down before acting.
“For new borrowers this isn’t great news as most are already going to have to deal with the impact of higher stamp duty thresholds from the start of April, so they would have benefitted from lower mortgage costs. They will be hoping for better news from May’s announcement.”
Kevin Shaw, National Sales Managing Director, LRG, said:
“Today’s decision by the Bank of England to hold interest rates was not a surprise, but it was a disappointment. At LRG we’ve had a strong start to 2025 but we are aware that the increased sales figures (year-on-year) are in part at least, due to a rush to beat the imminent Stamp Duty increase.
“Across the wider economy a loosening of monetary policy would have counter-balanced the recent fiscal tightening of which the Stamp Duty change is a component. With the ECB’s interest rate now at 2.5% after a further reduction last week, the gap between the Bank of England and the ECB rates is continuing to widen. Additionally, few mortgage deals are currently below 4%. The MPC was too slow to put rates up in 2022 and is increasingly looking too slow in reducing them now.
“The government’s favourite word seems to be growth, and yet in the wider economy growth seems nothing more than an aspiration. To seriously changes things up – specifically in housing delivery – monetary policy must align with the government’s objectives. The current level of interest rates act as a handbrake on future growth. Take the handbrake off and the housing market and economy will gain some momentum.
“With monetary policy having failed to mitigate the increased cost of buying a home (due to the rise in Stamp Duty), we are looking to next week’s Spring Statement for the Government’s next move.”
Ben Thompson, Deputy CEO, Mortgage Advice Bureau, said:
“The Bank of England’s decision to hold the base rate at 4.5% shouldn’t give prospective and current homebuyers much cause for concern. A small rise in inflation and a degree of global economic uncertainty calls for a cautious approach, and many people will no doubt feel a sense of relief that the Bank is playing it safe.
“With the Spring Budget almost upon us, all eyes are now firmly on the Chancellor to explore alternative avenues to foster a more accessible housing market and make homeownership a more affordable prospect for aspiring first time buyers.
“Whether you think you’re able to buy now or further down the line, speak to a mortgage adviser. With their expert guidance and support, you can get mortgage ready sooner than you think, and secure the right deal for your financial circumstances.”
Sarah Thompson, Managing Director, Mortgage Scout, said:
“The Bank of England’s decision to hold the base rate at 4.5% today was widely expected, but it highlights the need for caution in a confusing economic landscape. Inflation remains above target and is forecast to rise to 3.75% later this year, while global instability – from trade tensions in the US to ongoing geopolitical risks- continues to create uncertainty.
“While the European Central Bank has already moved to cut rates, the UK remains on hold for now, with expectations of two or three reductions before the year’s end. Despite this, mortgage rates remain competitive, with some five-year fixed deals, such as HSBC’s 3.98%, now sitting below the Bank of England’s base rate. This suggests that lenders anticipate rate cuts in the coming year, providing borrowers with opportunities to secure long-term stability.
“It’s also important to consider the bigger picture—while recent rate increases have been challenging for many, the average mortgage interest rate in the UK from 1995 to 2022 was 5.62%. In that context, today’s rates are not as extreme as they might feel, particularly for those who entered the housing market during a period of historically low borrowing costs.
“Lenders are also introducing more flexible options, such as Virgin Money’s five-year fixed rate with no early repayment charges after two years, should you move to an alternative product. As the market continues to adjust, borrowers will need to consider all available options to manage costs effectively and plan for the future.
“Brokers are experts in the nuances of mortgages, able to assess your personal circumstances and help you navigate both your financial situation and changes in the mortgage market. I would always suggest speaking to a broker before making decisions to ensure you have the full picture and access to the best possible options.”
John Phillips, CEO of Just Mortgages and Spicerhaart, said:
“Even the most avid supporter of rate cuts likely saw today’s decision coming – as did the financial markets with many already pricing in this outcome. As is often the case, it also mirrors yesterday’s decision by the Fed to keep interest rates unchanged amid similar economic uncertainty, slowing growth and higher inflation. We continue to hold our breath that future cuts are indeed coming, although like our US counterparts, the pace and frequency depends entirely on the economic outlook at home and abroad, and inflation dynamics – which in the UK remains sticky and highly volatile.
“Future cuts couldn’t come soon enough in a mortgage and property market that is still battling clear affordability challenges, not helped by the upcoming change to stamp duty thresholds. On top, we prepare for any potential surprises that may come in the Spring Statement next week.
“Thankfully, lenders continue to play their part to support borrowers and from our perspective, there is still appetite within the market with buyer registrations, valuation requests and mortgage appointment numbers all remaining consistent. It’s encouraging to see there is still a clear demand for advice and advisers will continue to play a pivotal role as clients try to navigate an ever-changing market landscape.”
Joe Pepper, UK Chief Executive Office at PEXA, said:
“There are 1.8 million fixed-rate mortgages set to expire this year, leaving a huge amount of people wanting more favourable mortgage rates. Instead, they are met with more uncertainty as today’s decision to hold the base rate will likely keep mortgage rates higher, at least in the short term.
“Those not willing to commit to a fixed rate in this environment are left to confront the reality of dropping onto their lender’s SVR in the hope that a lower rate will come up. That leaves them vulnerable to inflationary pressure and higher interest rates, but it also means there is a lot of pressure building behind the scenes of the property market. When rates drop, and they will, there will be a rush from borrowers to get their deal over the line.
“The problem is the infrastructure supporting conveyancers is just not equipped for such a stampede, and the impact of this is being felt in the immediate term by those looking to get their transactions completed before the Stamp Duty changes in April.
“It is clear digital transformation is needed to improve capacity for conveyancers, otherwise trying to stimulate the market is like the industry putting its foot on the accelerator with the handbrake still on.”
Daniel Austin, CEO and co-founder at ASK Partners, said:
“The Bank of England’s decision to hold interest rates steady reflects the ongoing balancing act amid Trump-driven market uncertainty, tariff policies, and the UK’s upcoming tax changes. The broader effect will hinge on how quickly lenders adjust mortgage rates and whether this holding pattern persists. For homeowners and prospective buyers, the appetite for lower rates, which should, in theory, make mortgages more affordable, is increasingly evident.
“Yet, with fixed mortgage rates staying stubbornly high despite earlier signs of easing, any immediate relief may be limited. Still, a more stable rate environment could gradually restore buyer confidence, particularly among those who’ve been holding back, waiting for clearer signals.
“For investors and developers, the path to rate cuts will be pivotal. Demand remains resilient, particularly in high-growth sectors like co-living and build-to-rent, where supply constraints continue to attract capital. As we approach a potential shift in government policy and economic direction, real estate stakeholders must stay nimble.
“Should rates fall, as some predict, this could spark a more sustained recovery in transaction volumes and investment flows. However, with uncertainty still looming, strategic financial planning remains essential to navigating the evolving landscape.”
Simon Capp, Head of Residential Sales at British Land, said:
“It’s no surprise to the residential market that the Bank of England rate has remained at 4.5% given its clear focus on inflation control. The earlier rate cut in February provided a gentle boost to sentiment, which we have seen continue into Spring with increasing new enquiries.
“From our own data set, the great majority of new-build transactions are currently to owner-occupiers seeking long term ownership. As a result, incremental rate changes don’t directly alter decision making given the outlook of rates moderating over the medium term. The residential sector would, however, welcome further cuts over the coming months to further spur activity”
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