The Bank of England’s Monetary Policy Committee (MPC) has voted by a majority of 8–1 to maintain Bank Rate at 3.75%.
The hold has been welcomed as a sign of stability by some, with Jason Tebb, president of online property portal OnTheMarket, calling it a cause for optimism among borrowers.
“As well as this, many people simply seem to move,” he said. “Especially if they have already put plans on hold due to pre-budget speculation – and these are proceeding with their transactions.”
Ben Thompson, director of home moving strategy at the Mortgage Advice Bureau, and Ben Nichols, managing director of RAW Capital partners, both agreed. ““The Bank of England holding the base rate brings a welcome sense of stability at a time of ongoing uncertainty,” Thompson said.
“While it won’t lead to an immediate drop in mortgage rates, it does support continued competition among lenders and gives borrowers a clearer backdrop to plan against.”
Nichols said: “For the property market, it also gives brokers and borrowers a bit more certainty in the short term. We’ve already seen some lenders start to reduce rates after initially pricing in more risk and, hopefully, today’s decision supports that trend and gives brokers and borrowers more confidence to move ahead with their plans.”
ASK Partners CEO Daniel Austin thinks the housing market is likely to remain subdued and at vulnerable to global triggers. “Any escalation that pushes up energy prices or market volatililty could easily complicate the disinflation story, leaving confidence fragile among buyers and developers alike,” he explained.
“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.”
The market is firmly in a mid-cycle lull, according to Search Acumen managing director Andrew Lloyd: “Prices broadly flat, deals dragging, and buyers waiting for signals. History suggests this phase won’t last forever. House prices have shown remarkable resilience over time, and with rates on hold, this may prove a narrow window of opportunity for buyers able to act before the next turn in the cycle.”
According to Joe Pepper, CEO of PEXA UK, the approach of the MPC is warranted in the face of ongoing economic and geopolitical uncertainty.
He said: “For the property market, a prolonged period of rate stability at this level means continued affordability pressures for buyers and uncertainty for those looking to move.
“Transaction volumes, while showing signs of recovery, remain sensitive to the interest rate environment, and conveyancers will continue to manage unpredictable workloads as buyer confidence ebbs and flows with each Bank of England announcement.”
