Interest Rates Held as Inflation Peaks — What It Means for Homeowners and Buyers

The Bank of England has voted to hold interest rates at 4%, signalling that inflation has finally peaked. This is a positive sign for homeowners, buyers, and investors after months of financial uncertainty.

Policymakers voted 5–4 in favour of keeping rates unchanged but said borrowing costs are “likely to continue on a gradual downward path.” In other words, rate cuts could be on the horizon, but not quite yet.

At OC Homes, we’re breaking down what this decision means, why it matters for the property market, and what buyers and homeowners should be thinking about right now.

Why the Bank Is Holding Back

Although inflation has slowed to 3.8%, still nearly double the Bank’s 2% target, Governor Andrew Bailey said he would “prefer to wait and see” if the downward trend continues before cutting rates. The Bank expects inflation to fall close to 3% by early next year, with a gradual return to 2% by 2027. However, it’s also forecasting slower economic growth, with businesses cautious about investing ahead of the Budget on 26th November, where new tax changes could be announced.

The Impact on Mortgages

For homeowners and buyers, this decision means stability, for now.

While rates remain at 4%, the hold indicates we may be nearing the end of the high-rate cycle. Many lenders have already started pricing in future cuts, which could lead to slightly lower mortgage rates in the months ahead.

What Buyers Should Know

Confidence is slowly returning to the market. As inflation cools and rates stabilise, buyers may find affordability improving, mparticularly first-time buyers who were priced out during last year’s rate spikes.

However, the Bank also warned that wage growth and service costs still need to fall further before inflation can fully settle. That means the Bank is proceeding cautiously, balancing economic recovery against the risk of prices rising again.

The Bigger Picture

The latest Monetary Policy Report forecasts UK growth at 1.5% this year, dipping to 1.2% in 2026 before recovering in 2027. Unemployment is expected to reach 5% by the end of this year, with jobseekers reporting “stiff competition” for roles — a sign of slower economic momentum.

Households are also tightening budgets, cutting back on spending and prioritising savings over major purchases. This trend may continue through the winter, though easing inflation could help restore confidence in 2025.

What This Means for You

At OC Homes, we’ve seen how quickly shifts in inflation and interest rates ripple through the property market — from mortgage affordability to buyer demand.

The message from the Bank of England is clear: inflation is easing, but stability comes first.

That’s good news for the housing market as it signals we’re entering a more predictable environment — something both buyers and sellers have been waiting for.

If you’re unsure how this affects your next move — whether that’s buying, selling, or remortgaging — our experts can help you plan with confidence.
📞 Call us today:
📍 London Office – 020 8556 1212
📍 Essex Office – 01708 989 888

Or click here.