The Bank of England held interest rates at 4.0% at its latest meeting in early November, but a crucial detail stood out: policymakers indicated that inflation has likely peaked, and a gradual interest-rate cut may be approaching– possibly as early as the next MPC meeting on 18 December 2025.
While no guarantees were made, markets are increasingly pricing in a potential reduction. And even the possibility of a rate cut has already started to influence the mortgage market. Lenders have begun trimming certain fixed-rate deals, anticipating lower funding costs ahead.
Why does this matter for home-buyers?
If the Bank Rate falls, mortgage rates are expected to ease further. Lower borrowing costs tend to attract more buyers into the market- especially those who have been waiting on the sidelines for affordability to improve. Increased demand, combined with the UK’s persistent housing shortage, may put renewed upward pressure on house prices in early 2026.
Should buyers act quickly?
There may be a short window where mortgage offers become more favourable before house prices adjust upward. For first-time buyers and investors, monitoring the December meeting could be key. Acting sooner while prices remain relatively stable might provide an advantage in a potentially rising market.
All eyes are now on 18 December 2025. A rate cut, if delivered, could mark the beginning of a new phase for the UK housing market.
For any questions regarding property purchases in the UK, feel free to contact us at Lex Home
