Bank of England Holds Base Rate at 3.75%

The Bank of England’s Monetary Policy Committee (MPC) has voted to hold the base rate at 3.75%, offering a moment of stability for buyers and sellers in a shifting market.

The decision will come as a relief to many in the property sector. With inflation still above the Bank’s 2% target - sitting at 3.3% following energy price shocks driven by the ongoing Middle East conflict - the MPC has opted for caution over action, resisting pressure to move rates in either direction.

The case for holding is straightforward. Domestic inflation had been easing steadily before the geopolitical shock hit, and the Bank is acutely aware that raising rates prematurely could choke off a fragile economic recovery.

GDP growth remains sluggish, wage growth is softening, and consumer confidence is still fragile after years of cost-of-living pressure. Acting too soon risks doing more harm than good.

Adam Jennings, Head of Residential at Chestertons, says: “Today’s Bank of England decisions to hold its rate gives the market the breathing room it needs.

“Buyer confidence has been rebuilding steadily through 2026 and a rate rise at this point would have been a setback. With rates stable, we expect motivated buyers to push forward with decisions they may have been sitting on - particularly in London, where demand continues to outpace supply in key areas.”

For mortgage holders and those looking to buy, the hold means lenders are unlikely to reprice significantly in the short term. However, with the MPC signalling that a rise remains on the table later in the year, those considering their options would be wise not to wait too long.