05/11/2026
Industry News 📰
🏡 Interest Rates & Property Prices
The Bank of England is widely expected to raise interest rates from 3.75% to 4% today, as rising inflation and economic uncertainty continue to put pressure on the UK housing market.
With inflation reaching 3.5% in September, policymakers face growing pressure to control rising costs. However, a further increase in borrowing rates could make mortgage affordability even more challenging for buyers and homeowners.
The anticipated decision comes alongside new forecasts from Savills, predicting that UK house prices could fall by 1.5% in 2027, with a sustained recovery unlikely before the second half of 2028.
Savills also expects mortgage rates to remain above 5% until early 2028, potentially limiting buyer demand and keeping property transactions subdued.
However, not all forecasts are as pessimistic. Connells Group predicts house price growth of 1.5% in 2027, highlighting the uncertainty surrounding the market's future direction.
While higher interest rates could increase repayments for some mortgage borrowers, much of the anticipated rise may already be reflected in fixed-rate mortgage pricing. The Bank's guidance on future rate changes could therefore be just as important as today's decision.
Despite the challenges, property experts do not anticipate a severe housing market downturn, with employment levels remaining relatively resilient and many homeowners having already adjusted to higher borrowing costs.
💬 Do you think higher interest rates will lead to falling house prices in 2027, or could the market prove more resilient than expected?
