Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

Base Rate Hold Brings Short-Term Stability, But Mortgage Outlook Remains Uncertain

The Bank of England’s decision to hold the base rate has provided immediate stability, but mortgage and finance industry figures caution that this should not be mistaken for long-term certainty. Several experts have highlighted ongoing concerns about future rate rises and the impact on borrowers, including those in the UK property sector.

Industry commentators noted that while the Monetary Policy Committee (MPC) has paused rate changes for now, the outlook has become more “hawkish”. Samuel Fuller of Financial Markets Online described the MPC’s stance as shifting from “watch and wait” to “watch and wait with a big stick”.

Alice Haine of Hargreaves Lansdown stated that the hold offers little immediate relief for borrowers on fixed rate deals, and warned that first-time buyers and those remortgaging may be increasingly concerned about potential future rate increases. She advised that those seeking new mortgages or refinancing should consider acting quickly rather than waiting for improved borrowing conditions.

Adam French of Moneyfactscompare.co.uk echoed these concerns, noting that borrowers should not expect significant falls in mortgage rates in the near term. He reported that the Moneyfacts Average New Mortgage Rate had risen by 0.16 percentage points over the past two weeks, from 5.43% to 5.59%, and that major lenders have continued to increase rates across various products.

Richard Pike of Phoebus Software warned that a base rate hold does not guarantee stable mortgage pricing, as fixed rate pricing is also influenced by swap rates and lenders’ funding costs. He pointed out that swap rates have been volatile since the start of the US-Iran conflict, leading to upward repricing by several lenders.

Ryan McGrath of Pepper Money said the hold offers borrowers “a breather”, but does little to ease financial pressures. He observed that more borrowers are choosing two-year fixed deals over longer terms due to uncertainty about future rates.

Colleen Babcock of Rightmove commented that while mortgage rates remain high, their relative stability is helping movers plan with greater confidence.

Martin Sims of Molo advised against making investment decisions based solely on expectations of future rate cuts, noting that the market has largely moved on from hopes of significant near-term reductions in borrowing costs.

For letting agents and inventory clerks, these developments suggest continued caution in the mortgage market, with potential implications for rental demand and property transactions.