The Bank of England has just announced its decision to hold the base rate at 3.75%.
This decision comes as a result of inflation (CPI) increasing slightly to 3.4% in December 2025, and still sitting well above the Bank’s 2.0% target.
The Monetary Policy Committee voted 5-4 in favour of maintaining the rate at 3.75%.
Today’s decision reflects continued caution from policymakers, with the Bank opting to maintain stability for now while assessing whether inflationary pressures will ease in the coming months.
Guy Gittins, CEO of Foxtons, said, “Today’s decision to hold the base rate is unlikely to disrupt a property market that has, once again, started the year positively.
With further rate cuts anticipated in 2026, buyer confidence remains high and we’ve seen the expected seasonal uplift in enquiries, viewings booked and offers being made. We anticipate this positive momentum from buyers and sellers will be sustained, creating a strong platform for the year ahead.”
Richard Merrett, Managing Director of mortgage adviser, Alexander Hall, said, “Today’s decision to hold the base rate is unlikely to dampen the market momentum that has been building in recent months, and we’ve already seen a noticeable increase in activity following the cut in December, with buyers hitting the ground running in the new year with a renewed sense of confidence.
This confidence has been mirrored by lenders, who continue to offer greater product choice and more flexible terms, particularly when it comes to loan-to-income multiples. As a result, the average homebuyer is now around £1,000 better off each year when it comes to the cost of their mortgage repayments when compared to just 12 months ago.”
Jonathan Samuels, CEO of specialist lender, Octane Capital, added, “No news is good news in the grand scheme of things, and today’s decision to hold the base rate provides welcome consistency for both lenders and borrowers, particularly given the fact that inflation climbed in December and remains higher than the Bank of England’s two percent target.
With this considered, a static base rate should provide lenders with the confidence to maintain competitive product ranges and pricing, whilst it also allows borrowers to plan with greater certainty. This will create a supportive environment for buyers and investors alike, helping to sustain activity and confidence across the property market..”
Damien Jefferies, Founder of Jefferies London, said, “Today’s decision to hold the base rate bolsters stability for international and high-net-worth buyers who are actively assessing opportunities in the UK market, with consistency in monetary policy helping to reinforce confidence and predictability when allocating capital across global property markets.
With borrowing costs remaining broadly stable, the UK continues to present an attractive proposition and this should support continued cross-border investment and enables buyers to plan acquisitions with greater certainty over the months ahead.”
Marc von Grundherr, Director of Benham and Reeves, added, “The housing market has continued to demonstrate strong levels of activity so far this year, with the December rate cut helping to put homebuyers firmly on the front foot heading into 2026.
As a result, enquiry levels, viewings, and transaction volumes have remained robust, underpinned by improving confidence and more stable economic conditions, with today’s decision to hold the base rate unlikely to rock the boat.”
Verona Frankish, CEO of Yopa, said, “While today’s decision to hold interest rates may have disappointed those homebuyers hoping for further reductions to mortgage rates, it is unlikely to dampen market activity, with many buyers remaining keen to progress their plans this year having gained confidence from stabilising interest rates over the course of the last year.”
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