Search Acumen comments on the latest interest rate decision

Andrew Lloyd , Managing Director at Search Acumen, says:

“Today’s decision to hold interest rates at 4% reflects the Bank of England’s continued caution in balancing growth against inflation, that, while stable, remains elevated at 3.8%. Stability in borrowing costs is welcome, particularly as the market awaits the Chancellor’s Budget later this month, but holding rates steady will do little to reinvigorate activity across the property market in the short term.

“The government is consistently missing its housing targets, where an interest rate cut would have been a major boost to help UK developers reduce borrowing costs, stimulate buyer demand, improve project viability, and increase developer confidence. Lower financing costs to ease these margins, particularly with smaller housebuilders, could have been a real win at a particularly vulnerable time for the sector.

“Looking ahead, for real estate investors, dealmakers, and lenders alike, confidence will depend on clear signals from both monetary and fiscal policy. The Budget could be that signal, but until then the cautious ‘wait and see’ mindset of many market participants is likely to persist. If inflation starts to move downwards, we could see further monetary policy easing later this year, which, paired with political stability and renewed investor appetite, would help unlock a more active property market heading into 2026.”