The Bank of England’s decision to cut the base rate to 3.75% is a welcome change after a long period of rising borrowing costs. While this shift won’t transform the property market overnight, it does signal a more stable environment for people thinking about their next move.
For buyers, sellers, homeowners and landlords, recent years have been shaped by caution and uncertainty. As we look towards 2026, this change offers a chance to pause, review options and plan with greater confidence.
Related: Budget 2025: What landlords and homeowners need to know – Lovelle’s market update
Why does the base rate play such an important role
The base rate is the interest rate set by the Bank of England, and it has a direct influence on everyday property decisions.
It affects:
- Mortgage interest rates
- Monthly mortgage repayments
- How much buyers can afford to borrow
- Activity levels across the housing market
When the base rate starts to fall, lenders usually adjust mortgage products gradually. Over time, this can ease borrowing costs and help support a steadier property market.
What this means if you already have a mortgage
If you are on a tracker or variable-rate mortgage, you may notice a small reduction in your monthly repayments. While the change may be modest, it can help relieve some pressure on household budgets.
If you are on a fixed-rate deal, nothing will change immediately. However, if your fixed term is due to end within the next year, it may be worth reviewing your options early so you can plan rather than rushing later.
What buyers may notice as conditions ease
Lower borrowing costs can make monthly repayments more manageable, which may encourage more buyers to begin or restart their property search.
This does not mean the market will suddenly speed up. Instead, 2026 is more likely to feel balanced, with buyers taking time to consider affordability, location and long-term suitability before making decisions.
Being prepared can make all the difference. Understanding your budget, deposit position, and mortgage options puts you in a stronger position when the right property comes along.
What sellers should keep in mind?
As affordability improves, buyer interest often becomes more consistent. While this does not necessarily lead to rapid price growth, it can support steady levels of activity.
For sellers, realistic pricing, good presentation and local market knowledge remain key. If selling is part of your plans for 2026, arranging an early valuation can help you understand your position and plan with confidence.
What landlords may want to review
Landlords have faced higher mortgage costs alongside wider changes in the rental sector. A base rate cut may offer some relief, particularly for those on tracker mortgages or approaching a remortgage.
Rental demand remains strong in many areas, helping to support the lettings market. This could be a good time for landlords to review finance arrangements, rent levels and longer-term plans.
Related: A key change for self-managing landlords takes effect this December under the Renters’ Rights Act
What the next year could look like
Further base rate cuts are possible, although this will depend on inflation and wider economic conditions. If borrowing costs continue to ease gradually, the property market is likely to remain steady rather than unpredictable.
The key takeaway is that this is a good time to plan. Whether you are buying, selling, remortgaging or reviewing a rental property, starting early gives you more choice and flexibility.
Related: Ending a tenancy under the Renters’ Rights Act: possession grounds for landlords from May 2026
Planning your next move with Lovelle
This base rate cut matters because it gives people more clarity when thinking about property decisions. While it doesn’t remove every challenge, it does make forward planning easier.
Property markets are local, and every move is different. Lovelle can help you understand what is happening in your area, explore your options and plan your next step with confidence.
Thinking ahead to 2026? Book a free property valuation with Lovelle to see where you stand and how to plan your move.
