'If this momentum continues, 2026 is shaping up to look very positive for the housing and mortgage market'
The Bank of England’s decision to cut the base rate to 3.75% has landed without drama, but brokers say its significance lies less in immediate pricing changes and more in what it confirms about the direction of travel for the mortgage market. With pricing already adjusted across much of the market, brokers say attention has shifted away from the decision itself and towards how lenders respond next.
What did surprise some advisers, however, was how narrowly the decision was taken - a reminder that the Monetary Policy Committee remains cautious even as the data improves. “I was surprised to see the decision so close with only five of the BOE members voting for a cut,” Malcolm Davidson of UK Moneyman told Mortgage Introducer.
For Alan MacKenzie of Your Next Step, the cut provides reassurance that conditions are stabilising after a prolonged period of uncertainty. “The Bank of England’s base rate cut has indeed been anticipated, especially given the recent improvements in inflation,” he said. “It’s definitely welcome news and offers a positive outlook for the remainder of 2025 and into 2026.”
MacKenzie said the move could support renewed competition among lenders. “We’re optimistic that this may encourage lenders to reprice their products, further boosting the mortgage market and supporting its ongoing recovery.”
Others urged caution against expecting immediate changes to fixed-rate pricing. Gaurav Shukla of Home Me Mortgages said much of the adjustment had already taken place. “Every base rate cut is welcome, although many in the market would have hoped for a slightly larger move,” he said. “Given the better-than-expected inflation data, it’s clear the committee opted for a cautious approach rather than moving too aggressively.”
Shukla said tracker borrowers would feel the benefit straight away, but stressed that confidence remains the more meaningful outcome. “Tracker borrowers will feel the benefit instantly,” he said. “The wider impact is more about confidence.”
Attention now turns to whether the easing cycle continues to feed through to the products most borrowers actually use. “The base rate reduction is very welcome, assuming that we see this reflected in fixed rate products which are among the most popular,” said Carolyn Dunion of McKendry Dunion.
For Charles Calvert of Easy Mortgages, the cut felt inevitable, but still important in timing. “It was very nearly reduced at the last review, so this move felt more like when rather than if,” he said.
Calvert said the combination of easing rates and falling inflation could prompt borrowers who have been waiting on clearer signals to act. “Lower rates will help ease affordability pressures and, more importantly, restore confidence,” he said. “If this momentum continues, 2026 is shaping up to look very positive for the housing and mortgage market.”
