🏡📉 How the Latest Interest Rate Decision Affects 2026 Moving Plan
⏱️ 4-minute read
The Bank of England has confirmed that Bank Rate has been cut to 3.75%. It’s a decision many people expected, but that doesn’t make it any less important for anyone thinking about moving in 2026.
After a year of uncertainty, this change offers a clearer picture of where things may be heading next.
📊 Why the Bank of England Cut Rates
Predicting interest rate decisions over the past year has been difficult. Mixed economic signals and changing forecasts made every announcement feel like a coin toss.
This time, the wider economy appears to have tipped the balance. Growth has been weak, with the economy shrinking again by 0.1% in October. Unemployment has risen to 5.1%, the highest level seen in four years. Neither of those figures suggests confidence on the ground.
Inflation has eased slightly to 3.2%, helped by falling food prices, though it remains well above the Bank of England’s 2% target. Under normal circumstances, that might have led to rates being held or even increased. Instead, the focus seems to have shifted toward supporting growth.
The November Budget also failed to lift confidence among businesses, which likely added weight to the case for a cut.
🏦 What This Means for Mortgages in 2026
Most forecasts now point toward further reductions in Bank Rate during 2026. Some economists, including Goldman Sachs, suggest rates could fall as low as 3% by next summer.
If that happens, borrowing costs for new mortgages and remortgages should continue to ease. For many households, that makes monthly payments more manageable and helps affordability slowly improve.
That said, interest rates are only part of the decision-making process.
🧠 How People Are Really Thinking About Moving
From daily conversations with buyers and sellers, it’s clear that confidence matters just as much as cost. Job security, household bills, and general stability all play a role in whether plans move forward or stay on hold.
When people feel uncertain about work or the wider economy, moving tends to slip down the priority list, even if mortgage rates look more appealing.
📈 Property Price Forecasts Bring Some Balance
There is some steadier news on prices. The Office for Budget Responsibility expects average house prices to rise by around 2.5% in 2026. Capital Economics is forecasting a similar range of 2.5% to 3%.
That points to a market that is stable rather than overheated. Modest price growth combined with falling mortgage costs could create a workable window for movers who have been waiting.
🔍 Our View Looking Ahead
We prefer to keep expectations realistic. The economic backdrop may keep things quieter over the next few weeks, which is fairly typical at this time of year.
Spring often brings a shift in momentum. If borrowing costs continue to edge down, confidence improves, and prices remain sensible, moving could return to the agenda for many households as 2026 gets underway.
We’ll continue to share clear updates as the picture develops and help make sense of what it means locally.
Wishing everyone a relaxed Christmas break and a very happy New Year.
Thanks for reading
Michael
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