The Bank of England has reduced the base rate to 3.75%. After a long period of rising borrowing costs, this change marks a shift that many buyers, homeowners and landlords have been waiting for. While it does not instantly make mortgages cheap again, it does begin to ease some of the pressure that has shaped property decisions in recent years.
Rather than triggering immediate change, this adjustment is more about creating breathing space. As we look towards 2026, it gives people a better opportunity to plan rather than react to constant changes in interest rates.
Related: Budget 2025: Whitegates’ insight for homeowners and landlords
What the base rate actually affects
The base rate is the interest rate set by the Bank of England. It influences how much it costs banks to borrow money, which then affects:
- Mortgage interest rates
- Monthly mortgage payments
- How much buyers can afford to borrow
- The overall level of activity in the property market
When the base rate falls, lenders usually adjust mortgage products gradually. Any changes tend to filter through over time rather than all at once.
If you already have a mortgage
How this change affects you depends on the type of mortgage you have.
If you are on a tracker or variable-rate mortgage, you may see a small reduction in your monthly payments. While this may not feel dramatic, it can help ease household budgets.
If you are on a fixed-rate deal, your payments will stay the same until your current term ends. However, if your fixed rate is due to finish in the next year, it may be worth reviewing your options early so you understand what deals could be available.
If you are thinking about buying
Lower borrowing costs can make monthly repayments easier to manage, which may encourage more buyers to start looking again.
That said, this is unlikely to lead to a rush. Most buyers remain careful and focused on affordability. As a result, the market is more likely to feel steadier in 2026, with buyers taking their time to find the right property.
Being prepared can make a real difference. Understanding your budget, deposit position, and mortgage options puts you in a stronger position when the right home comes along.
If you are considering selling
As borrowing becomes more affordable, buyer interest often becomes more consistent. This can help improve enquiry levels, even if prices do not rise quickly.
For sellers, the basics still matter. Pricing realistically, presenting your home well and understanding local demand all play a key role. If selling is part of your plans for 2026, getting an early valuation can help you decide when and how to move forward.
Related: Tips for selling a property with tenants
If you are a landlord
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, which continues to support the lettings market. As conditions begin to ease, landlords may find it a good time to review their overall position, including finance arrangements, rent levels and longer-term plans.
What the next year could bring
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.
For most people, the key point is that this is a better time to plan than it has been in recent years. Whether you are buying, selling, remortgaging or reviewing a rental property, starting early gives you more options and more control.
Related: Renters’ Rights Act possession grounds: what landlords need to know from May 2026
How to plan your next move
This base rate cut matters because it provides greater clarity. It does not remove every challenge, but it does make planning easier.
Property markets vary from area to area. Whitegates can help you understand what is happening locally, whether you are buying, selling or letting, and help you decide the right next step for your situation.
Thinking ahead to 2026? Book a free property valuation with Whitegates to understand where you stand and how to plan your move.
