The Bank of England has voted to keep interest rates on hold at 3.75% following today’s Monetary Policy Committee (MPC) meeting.
The decision leaves borrowing costs unchanged as policymakers balance rising inflation – which increased to 3.4% in December for the first time in five months – against conditions in the wider economy.
Despite the uptick in inflation, there is growing speculation that the MPC could cut rates in March, and more likely in April, if price pressures continue to ease.
Industry reaction:
Simon Capp, head of residential sales at British Land: “2026 has started with an optimistic outlook given the rate cuts back in autumn. While a rate hold by the Bank of England was expected today, further cuts would of course be welcome in assisting buyer mobility against a challenging landscape.
“Despite this, product rates have continued to taper downwards over recent months, with lenders bringing a broader range of products to market including for first-time buyers and increased loan to value mortgages. In the London new build market, build-complete developments are seeing the strongest sales traction with the predominant buyer demographic being owner-occupiers seeking long term ownership.”
Sarah Thompson, Group Financial Services Director, Mortgage Scout, part of LRG: “The decision to hold the base rate comes as no real surprise and reflects a period of growing stability rather than uncertainty in the mortgage market. While inflation crept up slightly at the end of last year, it is still expected to fall back towards the Bank of England’s target later in 2026, which keeps the door open for further rate cuts this year.
“Mortgage rates remain broadly stable. Where we have seen small increases from some lenders, this appears to be linked to stronger application volumes rather than a shift in economic outlook. Confidence in the sales market has improved at the start of the year, with recent house price data showing modest growth and transaction activity picking up after a quieter end to 2025. As a result, some lenders seem to be making marginal pricing adjustments to help manage volumes and protect service levels, rather than reacting to inflation or base rate expectations.
“The more meaningful shift is in affordability. Lenders are becoming increasingly flexible, with income multiples of 6, 6.5 and in some cases 7 times income now achievable depending on circumstances. Combined with steady pay growth and more measured house price increases, this is giving borrowers greater headroom and more confidence to move or refinance.
“With a large number of homeowners coming to the end of fixed-rate deals this year, we are also seeing more people proactively exploring options rather than staying with their existing lender. Remortgaging volumes are expected to grow strongly this year, and those who take the time to review their options will tend to find better value and greater flexibility than they expect. This is why advice really matters.”
Full article: https://propertyindustryeye.com/property-industry-reacts-to-bank-of-englands-interest-rate-decision-6/