Property experts have reacted to the Bank of England’s decision to maintain the UK base rate. 

Today, the Bank of England’s Monetary Policy Committee announced its decision to maintain the UK base rate at 5.25 per cent for the fourth time in a row. 

This followed 14 consecutive base rate increases from December 2021 until September 2023. 

Until August 2023, the base rate had not reached five per cent since 2008, with the higher base rate meaning that some homeowners saw higher mortgage costs. 

However, the decision to not raise base rates in recent months has kept interest rates at a steady level. 

Experts from across the property and finance industries have shared their insights and reactions. 

Nathan Emerson, CEO of Propertymark commented: “It is positive to see that many people intending to buy their first home or sell their current one won’t be hindered by an increase in interest rates.  

“However, it is now time for the UK government to continue to curb inflation so that interest rates can fall further to help ease the backlash this has had on people’s affordability. 

“They should make 2024 the year consumers start to enjoy some confidence again following three years of disruption to the economy.”  

Kellie Steed, mortgage expert at Uswitch.com, commented: “Due to expectations of cuts later in 2024, many mortgage lenders had already begun reducing their rates ahead of today's announcement. Both big six lenders, such as Halifax and HSBC and a number of building societies have reduced their fixed-rate deals multiple times throughout January. Some now have selected products available at around four per cent, and even slightly below that in certain circumstances.

“However, it remains to be seen whether there will be further cuts to mortgage rates in the coming days as a result of today's decision. Some economists are predicting that the base rate won't fall until May or June, however, London Stock Exchange Group data shows that the base rate is largely expected to fall an entire percentage point, down to 4.25 per cent, by the end of 2024.” 

Paresh Raja, CEO of Market Financial Solutions, commented: “The Bank of England continues to walk a tightrope. Sticky inflation is making them hesitant to cut rates, but a rise in company insolvencies and the general impact of a higher cost of borrowing on the UK economy is piling on pressure to drop the base rate.

“Either way, we now know the base rate has almost certainly peaked, and it is just a matter of time before it comes back down. 

“This shift has already started to have an impact on lenders and the property market in recent months. Mortgage, bridging and BTL rates all have started to fall, and there are the green shoots of recovery emerging after two challenging years, with early signs suggesting buyer demand and house prices are picking up. 

“The Bank might hold again – perhaps multiple times – before the cuts come, but the market is benefitting as that seemingly inevitable decision draws closer.”

Mohsin Rashid, CEO of ZIPZERO, said: “While the Bank of England is not tightening the vice any further, the pressure on people's finances remains painfully intense. For millions across Britain, holding the base rate at this level equates to crippling debt and mortgage repayments – sinkholes on their road to financial recovery.

“The cost-of-living crisis cut people deep, and these wounds are yet to heal. Now, with a government that refuses to provide meaningful long-term support for struggling households, the fact remains – consumers cannot wait for any lifelines to drag them to a better financial future.

"Savvy decision-making is a must for those struggling with high interest rates, persistent inflation, or both. From analysing supermarket prices or adapting buying habits to shopping around for competitive deals and using cashback apps, creative thinking is key to weathering the storm."

Andy Mielczarek, founder and CEO of SmartSave, said: "The question since late 2023 has not been if the base rate will fall, but when. Inflation has been brought under control, but not fully stamped out - the Bank of England is clearly not ready to loosen its high-interest-rate position just yet, but the expectation is that multiple cuts to the base rate will come between now and the end of the year.

“It’s important to remember that the interest rate remaining static does not mean savings products will do the same – fluctuating swap rates and the future actions of the ECB and the Fed will precipitate lower returns on Britons’ saving pots, which will leave savers assessing their options in the coming weeks.

“As seen with last month’s surprise increase, the fight to bring inflation back down is far from over, leaving UK households compelled to contend with the challenge of interest rates for a little while longer. 

“But this latest base rate announcement comes days after many households received their first pay package with reduced NI contributions, meaning more money in the pocket and an incentive to take advantage of the inflation-beating saving opportunities on the market.”