The Bank of England has voted to maintain the base interest rate at 4%, despite some signs the housing market is slowing down.

Members of the Bank’s Monetary Policy Committee (MPC) and Governor Andrew Bailey (main picture) voted 7-2 for a hold.

Price growth slows

The Office for National Statistics released figures yesterday showing a 2.8% increase in house price growth in the year to July, down from 3.6% the previous month.

And this decision to hold the rate is despite a stubborn inflation figure, which remained static at 3.8% yesterday, well above the Bank’s 2% target.

There will be another Bank interest rate decision on 6 November, before the Budget on 26 November.

Industry reaction

The estate agents

Amy Reynolds, Head of Sales at Richmond estate agency Antony Roberts

“This hold in rates at 4 per cent was expected, and is okay, as it provides stability and is far preferable to a rate increase.

“However, a drop in rates is required to give a boost to affordability which remains a brake on the housing market. For a real impact, we need the next reduction to be a half-point cut, rather than a quarter point,” she says.

“Never in my 25 years in the industry have I had so many conversations with people about the cost of stamp duty. The high cost of moving is prohibiting many from taking the plunge; people want to move but don’t feel confident enough to do so, which is causing stagnation in the market in some areas.”

Kevin Shaw, National Sales MD at LRG

“It is no surprise that the Bank of England has chosen to hold interest rates at 4%.

“GDP grew only very modestly in the second quarter, consumer price inflation (CPI) – as we saw yesterday – remains above target and the political backdrop is anything but stable. In such circumstances, it is far better to pause now than to cut rates only to raise them again in the months ahead,” he says.

“A potentially troublesome Budget is looming in November. For this reason and others, the Bank of England must appear to be steering a steady course, especially if there is a risk of choppier waters are ahead.”

Paul Hardy, Managing Director of LSL Estate Agency Franchising

“We did expect interest rates to fall this year – which they have, and by now it was generally predicted that the rates might be around the 4% mark – which they are. However, the current economic indicators are generally disappointing, and the uncertainty pervasive, so I am not at all surprised that there has been no movement in the rate this month.

“The news changes little for the housing market this year as the outcome for 2025 is more or less laid down, barring any surprises in November’s budget. Our Franchise partners are now focussed on capturing market share in the “back to school” seasonal surge and on completing as many sales as possible before the New Year.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman

“Doggedly steep inflation at a 19-month high in particular has clearly made the Bank of England even more nervous about cutting base rate despite wage pressures easing.

“So, what is the outcome for respective home buyers and sellers? More are likely to retreat further into their shells where they were already cowering in anticipation of budget tax rises,” he says.

“This is even more reason for sellers to recognise the importance of keen pricing and appreciate the first offer received may be the only one.”

The lenders

Gareth Lewis, Deputy CEO of specialist lender MT Finance

“By holding rates, the Monetary Policy Committee is demonstrating its commitment to continued vigilance with regard to inflationary pressures while providing a sense of stability for businesses and investors.

“For property investors, this decision may create a stronger demand for alternative financing solutions such as bridging loans. A measured approach is key, and we anticipate that a rate reduction is on the horizon as inflationary pressures continue to ease.”

Simon Gammon, Managing Partner, Knight Frank Finance

“The Bank of England’s decision to hold the base rate at 4% today comes amid growing consensus that we’re at, or near, the peak of this cycle. Markets have all but ruled out further rate reductions before the end of the year. HSBC and Deutsche Bank have pushed back their forecasts for the next cut, citing persistent inflation and economic uncertainty.

“Inflation remains stuck at 3.8%, well above the Bank’s 2% target, meaning the MPC is rightly cautious. Having already trimmed rates in August, it appears the Committee is waiting for more convincing evidence that inflation is easing consistently before moving again.

“In terms of mortgages, that suggests fixed-rate products may see less downward pressure than many hoped. Lenders will likely stay cautious, pricing in the risk that rates might stay higher for longer. Variable-rate borrowers may see little immediate change, with stability rather than relief the likely theme for the months ahead.”

The broker

Nicholas Mendes, Mortgage Technical Manager at John Charcol

“The Bank of England hold decision was widely expected. Markets had positioned for it, and swaps had already priced it in, so today’s decision on its own is unlikely to shift mortgage pricing.

“For mortgages, a well signposted hold is already in the price. I do not expect major reductions or a new burst of competitive repricing from lenders before the next couple of meetings,” he says.

“If we see a cut this year, December still looks the most plausible window. That gives borrowers room to secure a product now without worrying about missing a sharp sudden short-term drop-in rate.”

Industry leader

Nathan Emerson, CEO at Propertymark

“Throughout the world, many central banks have faced considerable pressure to reduce interest rates, and the UK has been no exception. The Bank of England remains in a challenging position to achieve long-term economic growth and not risk disrupting the progress already made.

“Today’s freezing of interest rates will give perspective to current homeowners and provide reassurance to those looking to take a new mortgage product, that costs will generally remain steady for the time being,” he says.

“Ultimately, it would be good to see base rates track downwards. However, it remains positive that we have seen an overall reduction since the start of the year, which has assisted in generating greater affordability for many.”

The portal

Matt Smith, Mortgage Expert at Rightmove

“A Base Rate hold today had looked fairly nailed on, especially after yesterday’s news that inflation remains stuck at 3.8%.

“The later-than-usual Budget is very much on the horizon, and the markets are having to wait until the end of November for answers to the questions that are driving a lot of the current uncertainty. So, it’s not surprising we’ve seen market expectations for the next Base Rate cut shift from late 2025, into early 2026,” he says.

“We’ve seen average rates drift up recently, and with today’s decision unlikely to relieve the pressure lenders are feeling, we could see rates continue to rise in the coming weeks.”