The Bank of England’s Monetary Policy Committee has held the base rate at 4.25%, citing consumer price inflation remaining in line with expectations and ongoing global uncertainty as reasons for deciding against a further 0.25% cut.
Announcing the decision, the Bank of England commented:
“There remain two-sided risks to inflation. Given the outlook, and continued disinflation, a gradual and careful approach to the further withdrawal of monetary policy restraint remains appropriate. Monetary policy is not on a pre-set path. At this meeting, the Committee voted to maintain Bank Rate at 4.25%.
“The Committee will continue to monitor closely the risks of inflation persistence and what the evidence may reveal about the balance between aggregate supply and demand in the economy. Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further.
Property industry reaction
Sharon Beedham, relationship director at ONP Solicitors
“What’s especially encouraging is the spike in first-time buyer activity despite the end of stamp duty incentives. That shows that real demand is still there — not just stimulus-driven. For many, consistency is more empowering than volatility. A held rate, while not headline-grabbing, gives movers a window to act with more certainty and less fear of shifting sands beneath them. And just as importantly it provides the industry with the space to plan, scale, and improve service without being blindsided by policy volatility.”
Jonathan Handford, managing director of Fine & Country
“While inflation remains above expectations, the housing market has shown remarkable resilience – buoyed by the May rate cut, improving mortgage affordability, and lender adjustments to borrowing criteria.
“Activity remains steady, with May seeing a four-year high in sales agreed. With supply also up 13% year-on-year, buyers are benefitting from greater choice, while house prices growth is being kept in check. Holding rates steady should help sustain market momentum without adding further inflationary risk.”
Iain McKenzie, CEO of The Guild of Property Professionals
“For the housing market, this decision provides stability rather than a new stimulus. The benefits of the May rate cut are still filtering through, with recent sub-4% mortgage headlines helping boost market activity to a four-year high for agreed sales. This ongoing momentum, coupled with lenders relaxing affordability criteria, means the market is well-placed to continue its resilient performance.
“While a further cut would have been welcome, today’s hold ensures the market remains on a steady footing. The balance between buyer demand and a healthy increase in housing supply will continue to support transaction levels while keeping price growth in check. All eyes will now be on the next set of inflation data to signal the Bank’s future direction.”
Jean Jameson, chief sales office, Foxtons:
“Stability is key when it comes to market confidence and since interest rates have started trending downwards we’ve seen robust mortgage approval numbers. These are now converting to more offers made, more sales agreed and even greater positivity with respect to the upward rate of house price growth.
“We’ve already seen many lenders re-introduce sub four percent product offerings as a result of increased competition and, with this level of market activity only expected to strengthen over the coming months, the nation’s buyers and remortgagers should continue to benefit from improved levels of affordability.”
Marc von Grundherr, director of Benham and Reeves
“Today’s decision to hold the base rate is a pragmatic one, and while it may not move the dial dramatically, it reinforces the growing sense of stability returning to the property market. In London, where the cost of homeownership is considerably higher, even small fluctuations in borrowing costs can have a significant impact on buyer sentiment and affordability.
“A hold on rates provides much-needed breathing room for those navigating the capital’s challenging market, particularly first-time buyers and upsizers who are already stretching their finances. We’ve seen renewed confidence over recent months, with buyers beginning to return and sellers adjusting expectations — today’s decision will help to maintain that momentum.
“While we’re not expecting a surge overnight, the foundations are being laid for a more active and balanced London market as we move through the remainder of the year. Stability breeds confidence, and that’s exactly what the market needs right now.”
Nathan Emerson, CEO of Propertymark
“There has been much talk of base rate cuts potentially happening across the summer months, and although today hasn’t delivered any dip, it remains positive to witness overall stability. This is especially prevalent when you consider the vast turbulence we have seen across the wider global economy.”
John Phillips, CEO of Just Mortgages and Spicerhaart
“While the changing narrative around interest rate expectations and the number of cuts isn’t entirely helpful and goes some way to unsettle borrowers, we can take comfort that the consensus is still that interest rates will be cut. While careful and gradual is fine to a point – especially given the bigger picture at play – an economy on life support requires some clear action and hopefully that will mean more than one cut later in the year. It will improve affordability, drive homeownership and deliver economic growth.”
Joe Pepper, UK chief executive officer at PEXA
“Those hoping for more favourable mortgage rates are once again confronted with uncertainty and exposure to fluctuating inflationary pressures. When rates eventually fall – and they will – there will be a scramble from borrowers to secure better deals.
“Conveyancers are already stretched, and a sudden surge in transactions could overwhelm the system. Now is the time to ensure we have the right infrastructure and technology in place to deal with this demand and ensure positive outcomes for all in the remortgage process.”
Property finance experts say…
Matt Smith, Rightmove’s mortgages expert
“Lenders have a bit of room to reduce rates further even with a hold in the Bank Rate today so home-movers can still be hopeful of some small mortgage rate cuts over the next couple of weeks. Average rates have been pretty flat in recent weeks, but we have seen increasing signs of competition amongst lenders as they have reduced their stress-testing criteria and with new mortgage products coming back to market, lenders are looking at ways to support more people get the home that they want.“
Daniel Austin, CEO and co-founder at ASK Partners
“Investors and developers are watching closely. Demand remains strong in resilient sectors like co-living and build-to-rent, where supply-demand imbalances keep capital flowing. A clear, downward path for rates would help unlock further activity – but with uncertainty still high, staying agile is essential.”
Stephanie Daley, director of partnerships at mortgage advisers Alexander Hall
“We’ve continued to see growing borrower engagement in recent months, driven by greater pricing stability and increased lender confidence. Even without a rate cut we have seen product choice across all segments of the market remain healthy and the number of products available for low-deposit mortgages has improved substantially since the start of the year.
“With this stable rate environment and improving affordability, we expect momentum to build further as we move into the second half of the year.”
Guy Murray, co-head of short-term finance at West One Loans
“For borrowers in the specialist finance space — especially developers and housebuilders managing larger, more complex funding needs — the lack of movement in rates keeps borrowing costs higher than they need to be at this point in the cycle. The market doesn’t just need stability, it needs momentum, and rate cuts are essential for driving that.
“There’s now growing concern that we may only see one cut in 2025, which simply won’t go far enough to unlock the full potential of development activity. Developers are eager to get projects moving, but they need the right financial conditions to do so — and that means action, not caution.”
Jonathan Samuels, CEO of Octane Capital
“This continued pause will still provide some much-needed reassurance for borrowers and lenders alike, maintaining the stability we’ve seen return to the mortgage sector in recent months.Transaction levels are picking up, mortgage approvals are on the rise, and sentiment among both buyers and investors is improving. We expect this momentum to build further through the second half of the year, laying the foundations for a more confident and active property market in 2025.”
Simon Webb, managing director of capital markets and finance at LiveMore
“We remain optimistic about the outlook for later life lending. With demand growing and awareness increasing, there are real opportunities to support older borrowers with tailored, flexible solutions — particularly as the market prepares for the potential of further rate cuts later in the year.”
