The Bank of England has announced its latest base interest rate decision.

And as expected, it’s an increase from 3.75% to 4.0%.

The rate hasn’t been this high since December 2023.

Agents have spoken out about the decision.

Jeremy Leaf, north London estate agent and a former RICS residential chairman:  “The Bank of England must weigh up concerns about rising inflation as Middle East hostilities show little sign of ending any time soon, against the prospect of choking off any growth in the economy.

“The Budget did little to lift the pressure on the Bank to raise rates and the impact of a rise on an already fairly flat housing market will not be positive. 

“The only silver lining is that a recent price war has prompted some larger lenders to reduce mortgage rates, although loans are still more expensive than they were at the start of 2026.”

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Richard Donnell, Executive Director at Zoopla: “Higher mortgage rates have been a drag on housing market activity since the Spring with sales agreed down 8% on last year and this latest increase in the base rate set to make more buyers pause and wait on their home buying decisions.

“Current mortgage rates already reflect financial market expectations of four further base rate increases, meaning average mortgage rates are unlikely to rise significantly in the short term unless those expectations change.”

“While there are fewer sales than this time last year, sales that are being agreed are happening just as quickly as a year ago as serious buyers become more selective. There is demand to buy homes but sellers need to price their homes carefully to ensure they attract the active buyers.”

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Simon Gammon, Managing Partner, Knight Frank Finance: “The Bank of England may be raising rates, but global events will exert the most influence on UK mortgage rates over the coming months. 

“At least four lenders have made cuts to their ranges since the beginning of the week as energy prices have eased. All four announcements came before the US midterm results, which prompted another sharp fall in oil prices. If that trend continues, we’re likely to see more lenders cut rates in the coming days.”

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Paul Hardy, LSL Estate Agency Franchising: ““Much of this is beyond the control of government and the banks. We need a more stable global economy and lower inflation before conditions can properly settle. 

“In the meantime, all of our Franchise Partners will remain focused on supporting those who still plan to or need to move, providing professional advice and guidance throughout what remains a challenging but not impossible market. There will always be demand from people whose circumstances require them to buy, sell, rent or let and we are always in a position to do the best for them.”

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Nathan Emerson, CEO at Propertymark, comments: “Last week’s Autumn Budget acknowledged several important consumer concerns, including rising energy costs and the ongoing challenges facing many first-time buyers. 

“Measures aimed at addressing some of these pressures are focused on stability, particularly where they could help improve access to homeownership and ease the long-term financial burden on households. Over the coming months, much will depend on how inflation and consumer confidence evolve.”

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Emily Williams, director of research at Savills: “The continued squeeze on mortgage affordability is expected to weigh on activity and values in the near term, and we expect UK house prices will fall by an average of -1.5% in 2027. But a stronger economic outlook from 2028 onwards, coupled with easing debt costs, will provide the foundation for a housing market recovery.

“House price growth is forecast to accelerate to 5.0% in both 2029 and 2030, as mortgage rates reach their low point and six consecutive years of income growth outpacing house price growth improves buyers’ purchasing power.”

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Kevin Shaw, National Sales Managing Director at LRG: “What the market has now is clarity. The Budget has come and gone without any real curveballs for buyers and sellers, and today’s decision is out of the way. 

“This time last year, the housing market spent much of the final quarter treading water while it waited for the Budget. This year, people know where they stand, and we’re cautiously optimistic about the start of 2027, when we expect the usual seasonal upturn as more buyers return.

“Prices have been correcting for the past two or three years while average wages have risen, so affordability is gradually improving, even if it’s still stretched. 

“Broadly speaking, we expect prices to be flat next year, although that will vary from one local market to the next.”

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Amy Reynolds, head of sales at Richmond estate agency Antony Roberts: “Today’s rate rise has been largely priced in already. Fixed-rate mortgages have been heading towards 6 per cent for weeks, and mortgage approvals have dropped to their lowest level in almost three years.

“The real damage is psychological. Another rate rise tells people that borrowing is getting more expensive, not cheaper, and that makes them hesitate. The people hit hardest are those remortgaging and second-steppers trying to stretch to one more bedroom. 

“On the back of this, we expect a quiet December for the housing market and a slow start to 2027. The sellers who still get deals done will be those who price realistically from day one.”

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Stuart Collar-Brown, Head of Acquisitions for BidX1 UK: “Today’s rate decision isn’t going to stop transactions, but it will change who’s buying what and at what price.

“Residential yield stock is taking the brunt of it. Smaller landlords exposed to bank finance are finding the maths increasingly difficult, and that’s driving a clear migration so what we’re seeing is residential investors re-gear and move capital across into commercial investments. Commercial is proving far more resilient right now, particularly anything backed by decent covenants.

“Portfolio landlords and cash buyers are still active because they aren’t reliant on standard bank debt in the same way, but even they’re demanding sharper yields to compensate for wider economic uncertainty. 

“Meanwhile, developers need to be mindful of their exit, if the end-occupier’s budget is capped by higher mortgage rates, end-resale values drop, which means developers have to buy the unmodernised stock cheaper in the first place to protect their margin.”

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Jason Tebb, President of OnTheMarket: “It is the end of the road for the ‘wait and see’ approach which has served the Bank well this year, helping create a steady environment at a time when there has been so much wider geopolitical upheaval.If inflation continues to rise, there may well be further rate increases to come, further impacting the affordability of those who might have been planning to move in the new year.

“Serious buyers and sellers continue to engage with each other but with the former having potentially less purchasing power after today’s announcement, the sensible pricing of property coming to market is essential.”