It was a close call, but the Bank has chosen to keep the rate the same for the time being. However, fixed mortgage rates have been decreasing slightly of late.
The Bank of England has decided to keep the base rate steady at 4% in its latest review on 6 November – a move that came after intense speculation about a possible cut. Here’s what the decision means for homeowners, buyers and the wider property market.
The Bank of England’s Monetary Policy Committee (MPC) has voted by a narrow margin of five to four to hold the base rate at 4%. While some economists and banks had predicted a small cut, the MPC opted for stability, with inflation remaining unchanged for two consecutive months at 3.8%.
Inflation concerns
Those hoping for a rate reduction had argued it could help boost the property market and restore buyer confidence. However, the Bank appears to be waiting for more consistent signs that inflation is easing before taking that step.
MB Associates’ Sales & Operations Director, Les Pick, says: ‘Inflation may be stable and the economy may be flat, but the Bank doesn’t feel confident enough to drop rates at this time because economists are predicting a potential small rise in inflation, rather than a drop.
‘Unfortunately, this means that the weekly shop and cost of energy for most families will continue to be higher than anyone would like.
‘The current economic situation means that sound financial advice is critical. If you have any questions or concerns, remember we’re here to help.’
Buyer demand still subdued
Property website Zoopla recently reported that buyer demand at the end of October was 8% lower than the same time last year, while sales agreed were down 3%. Despite this, mortgage approvals rose to 65,900 in September – the highest level since December 2023 – indicating that market activity remains steady.
A rate cut would no doubt have given an extra push to those considering buying or moving, but the current decision suggests the Bank is playing it safe for now.
What’s happening with mortgage rates?
Interestingly, some lenders have been reducing fixed rates slightly. This trend appears to be driven by competition between lenders and a slowdown in property transactions.
The next base rate review is scheduled for 18 December, and before that, the Autumn Budget will be announced on 26 November. Both will no doubt influence the outlook for interest rates and household finances.
As always, we’ll keep you updated. In the meantime, if you’d like advice on your mortgage or want to explore your options in light of recent changes, our team is here to help.