The Bank of England's Monetary Policy Committee has voted 8-1 to hold the Bank Rate at 4.5%.
The decision comes as a result of inflation (CPI) increasing to 3.0% in January 2025, and sitting higher than the Bank of England target rate of 2.0%. The decision to hold the base rate by the MPC was the result of eight members voting to hold at 4.5%, with just one member voting for a cut to 4.25%, a move which was widely expected.
Following the announcement, here's how the property industry reacted:
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, that 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."
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “As expected, the Bank of England voted to hold rates at 4.5 per cent this month. However, while predictable, the decision is disappointing as another rate reduction would help boost the housing market and wider economy, particularly as the stamp duty concession comes to an end this month.
“While the Bank remains concerned about rising inflation and sees it as a threat, the oncoming headwinds would appear to be stronger. The Bank must be proactive – by acting sooner rather than later and introducing further rate reductions, the money markets will shift expectations and swap rates should fall, which in turn will mean cheaper mortgage rates for borrowers.”
Nathan Emerson, CEO of Propertymark, said: “Today’s news will likely prove encouraging for many people who are hoping to progress on the housing ladder. It is reassuring to see the base rate held, especially considering the many national and international factors that continue to shape the global economy currently.
“With inflation currently standing at 3 per cent, which is above the initially targeted rate by the Bank of England, it is important there is very careful consideration over the forthcoming months to keep the economy heading on the right pathway. Higher interest rates can of course affect mortgage products that are on offer, so it would always be welcome to see base rates lower when the wider economy fully allows.”
Jeremy Leaf, a north London estate agent and a former RICS residential agent, says: “As expected, interest rates have remained at their 18-month low of 4.5 per cent. It seems concerns over the direction of travel for inflation, as well as volatility arising from the decisions by the US to raise trade tariffs, have outweighed the desire from the MPC to arrest the recent fall in GDP and confidence generally.
“Worries about the fallout from imminent increases in national insurance and the minimum wage are certainly weighing heavily on some when considering taking on extra debt. However, activity has remained relatively resilient recently and prices, though softening a little, have held up well, particularly for houses.”
Stephanie Daley, Director of Partnerships at mortgage advisor Alexander Hall, commented: “The nation’s homebuyers will be understandably disappointed that interest rates have remained frozen at 4.5% today, however, the landscape has improved dramatically in recent months and we have seen mortgage pricing track downwards since the start of the year.
"Both those looking to purchase, as well as those coming to the end of a fixed-term, will find themselves far better off today versus even this time last year and we expect the picture to continue to improve as a hold on the base rate brings ongoing stability to the market.”
CEO of specialist lender Octane Capital, Jonathan Samuels, commented: “No news is still good news for the nation’s borrowers and whilst they will have been hoping for a second cut this year following the reduction seen in February, it’s probably a case of wishful thinking given that inflation has reared its head again in recent months.
"A hold on the base rate will, at least, ensure that market stability continues to build over the coming months as buyers continue to act with the reassurance that mortgage rates are unlikely to climb.”
