Bank of England holds interest rates as Middle East conflict fuels market uncertainty

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Bank of England holds interest rates as Middle East conflict fuels market uncertainty

The Bank of England has kept interest rates at 3.75% due to the economic impact of the war in Iran.

The Bank of England’s Monetary Policy Committee (MPC) all voted unanimously to hold interest rates, citing the conflict in the Middle East as a key factor.

This coincides with the US Federal Reserve’s decision yesterday to also maintain their rate at the 3.5%–3.75%.

CPI inflation will be higher in the near term

The decision to hold rates was expected. Although markets had previously predicted a base rate cut in 2026, the war in Iran has pushed up oil prices and inflation, making rate cuts less likely.

The MPC report says: “Conflict in the Middle East has caused a significant increase in global energy and other commodity prices, which will affect households’ fuel and utility prices and have indirect effects via businesses’ costs. Prior to this, there had been continued disinflation in domestic prices and wages. CPI inflation will be higher in the near term as a result of the new shock to the economy.

“The MPC was also assessing the implications for inflation from the weakening in economic activity that was likely to result from higher energy costs. In contrast to the energy price shock in 2022, this shock was occurring at a point when growth was below potential and the economy was operating with a margin of spare capacity.

“Increases in household fuel and utility costs, and other prices, would squeeze real incomes. Household and business confidence could deteriorate and precautionary saving could rise, further weighing on demand.

Industry reaction to Bank of England holding interest rates

Joshua Elash, director of specialist lender MT Finance, says: “Set against the dramatic backdrop of the conflict in Iran, this was the only expected outcome. It’s time to hold. This should be a brief measure.

“It is expected that visibility on a successful conclusion to the conflict with Iran will ease concerns on the impact rising energy costs are going to have on inflation. Only then would we expect the MPC to resume its previous course of gradual reductions to the base rate.”

Kevin Shaw, National Sales Managing Director, LRG: “The Bank of England sitting on its hands today will not come as any great surprise. Only a few weeks ago, a cut looked quite likely, but the renewed instability in the Middle East and the inflationary shadow cast by higher oil prices have clearly made Threadneedle Street a little more cautious.

“That said, the housing market has so far shown a fairly British talent for keeping calm and carrying on. We are not seeing the conflict translate into any meaningful slowdown in agreed sales or new listings, and our application levels from would-be buyers are up 9% on 2025.

“For all the noise around inflation and geopolitics, plenty of people still want to move and, crucially, are willing to get deals done. The market remains price sensitive, as it has for the past two years, but demand is clearly present.”

Welcome sense of stability

Nathan Emerson, CEO of Propertymark, said: “The decision to keep base rates on hold provides a welcome sense of stability for the property market. Mortgage repayments remain predictable, which is critical for households balancing cost-of-living pressures. Stability in interest rates can support continued buyer confidence and property transactions, particularly in a market already facing supply constraints and rising house prices.

“For sellers and landlords, this environment allows for measured planning, while buyers can explore financing options without the immediate concern of rising borrowing costs.”

Geopolitican events can shift housing market expectations

Lucian Cook, head of residential research at Savills, comments:  “The Bank of England’s decision to hold the base rate highlights how quickly geopolitical events can shift housing market expectations.

“Hopes of easing inflation and future rate cuts have been knocked back by renewed pressure on oil prices, with markets now contemplating that 2026 will end with the base rate at the same level, or even higher, than when the year began.

“This points to a property market that will remain price-sensitive, with the prospect that values will continue to fall in real terms over the course of this year.  The extent to which this translates into nominal price falls depends on how global events play out.

“For now, lenders are expected to act more cautiously, the impact of which will be felt most keenly by first time buyers who are more reliant on higher-loan-to-value lending.”

Financial markets more volatile

Matt Smith, mortgage expert at Rightmove, said: “The decision to hold the Bank Rate was widely expected, and for most homeowners and home buyers, there’s no immediate change to worry about. For those looking to secure a new mortgage rate or coming up to remortgage, even small rises in rates can have a real impact on monthly budgets, and lenders are very aware of that.

“Recent geopolitical uncertainty has made financial markets more volatile. That volatility feeds into swap rates, which are the underlying costs lenders use to price fixed rate mortgages. As a result, some mortgage rates have nudged up slightly this week, even though the Bank Rate itself hasn’t changed.

“Lenders are being understandably cautious in this environment. Some are quicker than others to adjust rates, which can lead to uneven changes across the market.

“These recent rises are understandably concerning for anyone preparing to take out a new mortgage or remortgage. Even a small increase can make a real difference to how a monthly budget feels. For context, the average monthly mortgage payment on a new purchase has increased by around £45 so far, but is still around £70 lower than it would have been at this time last year.

“This is an unfortunate but expected pattern in the way mortgage pricing moves when markets are unsettled. For now, the Bank Rate remains stable, mortgage rates remain significantly lower than the peaks seen last year, and there continues to be strong competition among lenders, even if some buyers choose to pause while the picture settles.”

More hawkish than economists had anticipated

Simon Gammon, managing partner, Knight Frank Finance, said: “The Bank of England’s decision to hold rates at 3.75%, with a unanimous vote from the MPC, is slightly more hawkish than economists had anticipated. Consensus had pointed to some dissent.

“The shift in inflation expectations is notable. The MPC now expects CPI to sit between 3% and 3.5% over the coming quarters, rather than falling back towards target as previously forecast.

“For borrowers, there is little immediate comfort in this decision. While there is a possibility that mortgage rates begin to stabilise if energy markets settle, any prolonged geopolitical pressure is likely to keep upward pressure on pricing. We have already seen best fixed rates move from just above 3.5% a month ago to sub-4% deals disappearing quickly. Lenders are also repricing products with very little notice, which creates a challenging environment for borrowers.

“The key advice is to secure a rate as soon as possible. In most cases, these deals can be renegotiated if conditions improve, but waiting carries clear risk in the current climate.”

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Rent controls do work claims Green Party

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Rent controls do work claims Green Party

The Green Party claims that “rent controls can work,” despite evidence suggesting otherwise.

Speaking at the New Economics Foundation, Green Party leader Zach Polanski claimed rent caps would help tenants facing rising rents.

He also called for the abolition of the right-to-buy scheme.

Rent controls can work

In the speech, Mr Polanski said: “Spiralling rents are ripping the heart out of communities across the UK. Renters are being forced to cut back on essentials just to afford the cost of a roof over their heads, and it’s not just individuals who suffer as a result, it’s the entire economy.

“So it’s time to do things differently. We know that rent controls can work, and we can learn so much from the different models that have been tried elsewhere. Rent controls are an established part of private renting in 16 European countries and it couldn’t be clearer that the UK’s got some catching up to do.

“If we had frozen rents in autumn 2022, households in Britain would be saving over £3,300 per year on average. Across Britain, that would put £18bn of purchasing power back in the pockets of ordinary people, money that could be spent in local businesses, buying a coffee on the way to work or a few pints at the end of a hard week.

“Instead? straight into landlords’ pockets, leaving our high streets hollowed out. Green MP Carla Denyer tried to fix this scandal, pushing for rent controls to be included in the Renters Rights Bill, but this Labour government just wouldn’t listen. A Green government would bring in rent controls. We would stop the chokehold of rip-off rents and breathe life back into our communities.”

More harm than good

However, Mr Polanski failed to mention that rent controls do more harm than good and actually do far more damage than benefit tenants.

According to the Institute of Economic Affairs (IEA), while rent controls may initially lower rents for existing tenants, they typically lead to higher rents in uncontrolled sectors and reduce housing supply and quality.

Even in Scotland, the rent cap has been blamed for soaring rents, which have increased by 11.6%.

Data by Hamptons reveals Scottish landlords are increasing rents at a faster pace than anywhere else in Great Britain because of rent controls reshaping the market.

Lead analyst at Hamptons, David Fell, said: “The evidence from Scotland suggests that rent controls rarely work as intended.

“At best, they delay rent increases; at worst, they set a new benchmark where landlords feel compelled to increase their rents every year by the maximum allowed.

“Faced with uncertainty over future rules, many landlords choose to raise rents little and often rather than risk falling far below market levels.”

Need to end right to buy

Mr Polanski also claimed the Green Party would abolish right-to-buy.

He said: “Over two million houses have now been sold under right to buy since it was introduced. In the first place, those houses went to people who had worked hard and saved up to own the home they lived in and loved, but now they’re increasingly owned by private landlords, property developers and investment firms who treat those homes, and their tenants, as cash cows.

“One in six private renters is now renting a former council home, often at extortionate rates, and often partly paid for by the government in the form of housing benefit. Another example of a system which is not only totally unfair but utterly incoherent. Our Green MP Sian Berry, she’s been fighting hard to end this mess, calling for councils to be able to buy back homes lost through right to buy.

“We need to end right to buy completely. Build more council homes and control rents so everyone can afford a decent roof over their heads.”

You can watch Mr Polanski’s speech below with him talking about rent controls at 42:35

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PRS Database to ease administrative burden claims government

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PRS Database to ease administrative burden claims government

The government claim they want to minimise the administrative requirements on landlords with the upcoming Private Rented Sector Database.

Under the Renters’ Rights Act, all landlords will need to sign up for the database, which will include information about their properties that tenants can access.

The government has not given a definitive timeline for when landlords will need to sign up, but the rollout will commence later this year.

Minimise administrative disruption

In a written question, Conservative MP Gareth Bacon asked: “What assessment has the government made of the need for the PRS database to allow block-registrations to accommodate large-scale landlords.”

In response, Housing Minister Matthew Pennycook said: “The government is considering how data might be collected with a view to minimise administrative requirements on private landlords.”

As previously reported by Property118, the government has hinted at combining the registration process for the PRS database and Ombudsman, but stopped short of confirming whether landlords will be required to pay separate fees for each scheme.

Mr Pennycook claims the fees for the PRS Database will consider the burden on landlords.

He said: “Fees to register on the PRS Database will be set out in secondary legislation and will take account a range of factors, including burden on landlords.

“In line with practice across other Ombudsmen, the PRS Ombudsman will set the fee members would be required to pay. This will be on the basis of their running costs and service provision. The ombudsman would not be able to make profit and the government will ensure that the fee is proportionate and is good value.”

If a landlord lets or advertises a property without it first being registered on the database, they can be issued with a civil penalty of up to £7,000 or a £40,000 fine if they provide fraudulent information to the database.

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Landlord online searches spike ahead of Renters’ Rights Act reforms

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Landlord online searches spike ahead of Renters’ Rights Act reforms

Landlord online search activity tied to the Renters’ Rights Act has climbed in recent months as May’s implementation date draws closer.

An analysis from Dwelly, based on Google search trends, shows a clear increase in queries over the past three months when compared with the previous quarter.

The lettings agency acquisition platform says searches for ‘Renters’ Rights Act’ rose by 86.4% in the latest three-month window.

At the same time, queries for ‘landlord ombudsman’ increased by 157.5%, pointing to rising interest in oversight and redress.

Landlords prepare for RRA

The firm’s Sam Humphreys said: “The spike in search activity shows that landlords are actively trying to understand what the Renters’ Rights Act will mean for them and their portfolios and, with the most significant reforms arriving in May, it’s clear that many are now starting to prepare for the practical implications.

“For letting agents, this creates both a responsibility and an opportunity.”

He added: “Landlords are looking for clear guidance on what the changes mean and how they should respond, whether that’s adapting tenancy structures, understanding the removal of Section 21, or preparing for the introduction of the landlord ombudsman and new pet rules.”

Understanding the end of Section 21

The Renters’ Rights Act is being rolled out in stages and includes the removal of Section 21 ‘no-fault’ evictions and a move to periodic tenancies across the PRS.

There’s also a ban on bidding above asking rent, and rules allowing tenants to keep pets.

The last issue has seen searches linked to pet rules increased by 111.8%.

Dwelly also says that searches on understanding the abolition of Section 21 rose by 13.1%.

Searches tied to the Decent Homes Standard fell by 11.5%, and interest in fixed-term tenancies slipped by 2.8% over the same period.

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17) Why selling a mature property portfolio is rarely the obvious solution it first appears to be

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17) Why selling a mature property portfolio is rarely the obvious solution it first appears to be

At some point, many landlords find themselves considering a simple question: Would it be easier to sell? 

After years of building and managing a portfolio, the idea of simplifying everything into cash can feel appealing. Fewer responsibilities, fewer moving parts, and a sense of closure after decades of work. For some investors, that path may be entirely appropriate, yet for many landlords with mature portfolios, the decision is rarely as straightforward as it first appears.

The appeal of simplicity

A property portfolio can take decades to build, and along the way, it accumulates not only assets, but also responsibilities. Tenants, agents, maintenance, compliance and financing arrangements all require ongoing attention. It is therefore perfectly natural that, at a certain stage, landlords begin to ask whether simplifying the entire structure might be the most sensible next step.

Turning a complex portfolio into a single pool of capital has an obvious attraction.

When the full picture begins to emerge

What often becomes clear on closer examination is that selling a mature portfolio is not simply a transaction; it is a transition. Assets that have been built over many years are converted into capital that must then be managed in a completely different way. The question is no longer how the portfolio performs, but what replaces it. That shift can introduce a different set of considerations.

The questions that are not always obvious at first

Once landlords begin to explore the idea of selling, certain questions tend to arise.

What happens to the income that the portfolio currently generates?

How easily can that income be replaced with the same level of reliability?

What are the implications of converting long-term assets into immediate capital?

What role would the proceeds play in the next stage of financial life?

These are not reasons to avoid selling; they are simply part of understanding the full picture before making a decision that is, by its nature, difficult to reverse.

Why mature portfolios behave differently

A portfolio that has been built over many years often operates very differently from one that is still in its growth phase. Borrowing may be modest, equity may be substantial, and income is more likely to be well understood. In that context, the decision to sell is not simply about releasing value; it is about replacing something that has already demonstrated its reliability with something that has yet to do so. That is where the conversation often becomes more nuanced.

When selling feels like the default option

It is interesting how often selling is considered as the first solution rather than one option among several. Part of this comes from the natural desire to simplify, whereas another part of it comes from uncertainty about what else might be possible. When a portfolio reaches maturity, the range of potential strategies can widen rather than narrow, yet those alternatives are not always immediately visible when the focus is on day-to-day management.

The stage where many landlords pause

We increasingly find that experienced Property118 readers reach a point where they begin to consider whether selling is the right next step. Interestingly, the portfolios involved are rarely under pressure. More often they are stable, established and performing well.

The question arises not from necessity, but from a desire to understand what the next phase of the journey should look like.

That is usually the moment when it becomes worthwhile to examine the full range of possibilities before making a decision.

An invitation for established landlords

If you have built a substantial portfolio and are considering whether selling is the right next step, it may be worth stepping back and looking at the wider picture first.

You are welcome to email a copy of your latest property portfolio spreadsheet to Yvonne@Property118.com. From there we can arrange a free introductory discussion to explore the strategic questions your portfolio may raise.

These conversations are typically most useful for landlords with established portfolios and modest borrowing who are beginning to consider how their assets should support the years ahead.

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Landlord properties in “prime areas” are selling faster than last year

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Landlord properties in “prime areas” are selling faster than last year

It’s hard to fathom that there’s a sector of the property market that’s actually doing better this year than last year when it comes to landlord portfolios, but that’s exactly the case for landlords who have been looking to sell their properties in what’s been dubbed the “prime areas.”

As landlords yourselves, you’ve no doubt been considering selling, and for good reason. As we head towards the final hour before the Renters’ Rights Act comes in, it’s crunch time for landlords who want to clean up their acts and their portfolios before they’re served the hefty fines that accompany a long list of obscenely complicated regulations.

But for most landlords, selling is proving more tricky than expected.

Perhaps you’ve had problem tenants on low rents, in arrears, on benefits or tenants who’ve been trashing your properties. Maybe you’ve got elderly tenants who you feel like you can’t evict.

Perhaps you’re a landlord who’s simply had enough and wants to retire? Or perhaps financial reasons are pushing you to get out: Section 24, tax, mounting refurb costs, empty properties, high mortgage rates, compliance costs – all adding up to what is essentially no profits.

Whatever the reason, landlords have been struggling to sell.

 But for a substantial number of them, the opposite is true. Properties are selling faster than ever before, and for high prices.

Why? They have what we at Landlord Sales Agency call the “RRR formula.” The Right Property, at the Right Price, in the Right Location.

In particular, we’re referring to freehold houses in the North West and Midlands priced between £70,000 and £150,000. These properties are attracting serious buyers with seriously lucrative offers.

When those three elements line up, we’re noticing properties selling quickly for prices landlords are extremely happy with. It’s like no other location in England. In these areas, for these prices, landlords are selling properties like hot cakes.

In fact, many of the properties are not only selling in under 28 days, they’re frequently achieving more than landlords would receive selling directly to the investor market or rushing to auction. That’s because for properties like these, there’s been an influx of interested first time buyers. And when you pit first time buyers against new landlords or investors, prices rise.

Whilst landlords need to be realistic, in that for a fast sale they’re not going to get 100% market value; an offer that’s both higher than the investor market and a substantial amount more than panic selling at auction is exactly why they’re rushing to us at Landlord Sales Agency to sell. And we’re delivering.

In fact, every week around 80 landlords are coming to us to sell with properties that fit the RRR formula, and we’re seeing them sell faster than anything else out there.

Coupled with the fact that we take the entire management of the sales off your hands, including negotiating with tenants, and you can see why so many landlords are reaching out. Make no mistake, we still have to be savvy: listing properties for high prices isn’t going to work, you’ve got to list them for attractive prices to get viewings piling through the doors, but that’s exactly what our team does best.

So if you’re a landlord, who has freehold houses in the North West and Midlands priced between £70,000 and £150,000, get in touch today.

We have the market. Now is the best window to act. And with our formula 1 style strategy to getting properties sold, you’ll find that selling your property can be straightforward, fast and surprisingly stress-free.

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First-time buyers rethink careers to afford homes

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First-time buyers rethink careers to afford homes

First-time buyers are rethinking their careers in a bid to close a £21,646 income shortfall and secure a home, research suggests.

Aldermore’s First Time Buyer Index shows 35% of prospective buyers need to increase their annual salary by more than £21,000 to meet their property ambitions.

That’s necessary to deal with mortgage rates and house prices continuing to hit affordability.

Also, nearly two thirds (64%) of aspiring buyers say they are saving more than they first planned, pushing the expected average deposit to £48,168.

Reshaping their lives

The lender’s director of mortgages, Jon Cooper, said: “The UK’s first time buyers aren’t just tightening their belts, they’re rethinking their entire career paths to try and get on the ladder.

“From chasing pay rises to moving into different roles, prospective homebuyers are reshaping their working lives to secure a home of their own.”

He added: “Their ambition is as strong as ever, but the sacrifices they’re making are more significant.”

Buyers looking to switch roles

The research found 40% are looking for higher-paying roles, while 22% say they have negotiated a pay rise.

Another 21% have switched careers or are weighing it up, and 20% have moved jobs in pursuit of larger bonuses.

Around 17% have delayed leaving their current job to strengthen a mortgage application.

And 13% report entering or considering careers they do not enjoy to secure a purchase.

Will be paying more

Despite these efforts, expectations around monthly costs do not match reported outcomes.

Prospective buyers say they would commit 27% of their income to mortgage payments.

Existing homeowners who bought as first-time buyers report spending closer to 31% of their salary after tax.

The figure rises to 41% for those aged 18 to 24, and 37% for buyers living near London.

Aspiring buyers expect to be 37 before getting the keys, compared with 31 among recent first-time buyers.

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Student areas dominate buy to let hotspots – Paragon

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Student areas dominate buy to let hotspots – Paragon

Postcodes with large student populations dominate 2025’s buy to let investment activity as landlords look for areas offering strong yields and consistent tenant demand.

According to lending data from Paragon Bank, Cardiff’s CF24, Nottingham’s NG7 and Manchester’s M14 top the table.

The data is based on completions between 1 January and 31 December and each of those postcodes have a large university population and a well-established lettings market.

Elsewhere, Loughborough’s LE11 and Gloucester’s GL1 also feature prominently with demand from students and younger tenants supporting a strong lettings market.

landlords targeting strong returns

The bank’s managing director of mortgages, Louisa Sedgwick, said: “This year’s rankings show a clear and enduring trend; the strongest buy to let markets are those supported by large student populations and a solid flow of young renters, supplemented by other sources of tenant demand, such as hospitals or employment centres.

“Landlords are increasingly targeting locations where tenant demand is predictable and yields remain consistently high.”

She added: “From Cardiff and Nottingham to Manchester and Leeds, these hotspots highlight how investor strategy has become more focused and data‑driven.

“Rather than being deterred by the wider economic environment, landlords are choosing resilient, high‑performing rental markets that continue to deliver strong returns.”

Landlords opt for terraced homes

Across the BTL hotspots, Paragon says terraced housing remains the most common purchase type.

That’s because they suit shared living arrangements and sit at lower price points, which continues to attract landlords.

For yields, Plymouth’s PL4 delivered 9.78%, the highest of the top 10.

Gloucester’s GL1 followed at 9.66%, with Hull’s HU5 at 9.01%.

Seven of the 10 locations recorded returns above 8%.

Only Croydon’s CR0 appears in the hotspot list without a university driver, producing yields of 5.93%, reflecting commuter demand and regeneration activity, with converted flats forming a notable share of purchases.

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More than one in four landlord sales have tenants in place

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Property118

More than one in four landlord sales have tenants in place

More than a quarter of landlords who sold a property over the past year did so with tenants still in place, research reveals.

According to data tracking how homes move through the private rented sector, landlords typically sold an average of 1.8 properties with sitting tenants.

The latest Pegasus Insight Landlord Trends survey shows that a tenant’s occupancy often continued despite a change in ownership.

Also, around 30% of homes sold by landlords were acquired by another landlord.

PRS is shrinking

The firm’s founder and director, Mark Long, said: “Landlord sales do not automatically mean a rental property disappears from the sector.

“In a meaningful minority of cases the property is simply being transferred from one landlord to another and sometimes sold with tenants already in place.”

He added: “However, the overall direction of travel still points to a shrinking PRS.

“When a substantial proportion of landlord sales are going to first-time buyers or other owner occupiers, it inevitably reduces the pool of homes available for rent.”

Policies must help landlords

The research highlights that the 30% of homes being sold to other landlords points to stock being transferred within the sector rather than leaving it entirely.

However, a larger share of sales involved buyers intending to live in the property.

First-time buyers made up 34% of purchases, while a further 29% went to other residential buyers.

Those transactions move homes away from the lettings market and reduce the number of properties available for rent.

Mr Long said: “Policymakers must recognise the cumulative impact of ever tighter regulation and rising taxation on landlords, particularly smaller operators.

“Many are deciding that the pressures and uncertainty are no longer worth it.”

He adds: “This is significant because the PRS provides homes for around 20% of the UK’s households, so policy decisions affecting landlords ultimately have consequences for tenants too.”

If you would like to discuss quickly selling your rental property with experts, contact Landlord Sales Agency:

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House prices rise 1.8% as regional divide persists

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Property118

House prices rise 1.8% as regional divide persists

The latest house price index from e.surv Chartered Surveyors puts the average price across Great Britain at £329,000 in February,

That’s the equivalent of an annual growth of +1.8%, and activity has strengthened during the first two months of the year.

The firm points to improved affordability, lower volatility in mortgage pricing and the return of buyers who delayed purchases last autumn.

Mortgage valuation volumes show that, historically, this level of valuation activity tends to translate into completed sales within two to three months.

House prices fall

However, house prices month-on-month show a –0.1% change, while quarter-on-quarter movement stands at –0.4%.

Affordability continues to influence buying decisions, particularly in higher value regions.

At the same time, lenders remain cautious around margins as borrowing costs fluctuate.

Regionally, Scotland continues to lead the market with annual growth reaching +4.3%.

The average property price is now £226,500.

Regional price rises

The North West and Wales follow closely behind with annual increases of +3.4%, and average prices of £249,000 and £235,500 respectively.

Yorkshire also posted annual growth of +3%.

Prices in the West Midlands rose +2.8% to £279,500, while the East Midlands recorded +2.3% growth with an average value of £266,000.

London remains weaker and prices are –2.5% lower year on year, extending a sequence of 34 consecutive months of annual declines.

In the South East and East of England, prices remain slightly higher than a year earlier with declines of between –0.6% and –0.7%.

Volatile backdrop

The firm also points to March beginning with an unsettled global backdrop and creating volatility across financial markets.

Swap rates have become less predictable, leaving a lending environment that differs from expectations earlier in the year.

Some lenders have already increased mortgage pricing or withdrawn products over the past week.

Despite that, current mortgage rates remain below levels recorded in late 2023.

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