Interest rates freeze in April; however, the Bank of England warn that they’re prepared to increase rates if inflation doesn’t cool.
The Bank of England (BoE) has announced its decision to maintain interest rates at 3.75%. While the hold provides a momentary pause for the Buy-to-Let market, the Monetary Policy Committee (MPC) issued a stark warning: they are prepared to move “forcefully” with rate hikes if inflation does not cool.
For landlords and property investors, this decision signals a period of wait-and-see amidst a volatile global backdrop.
The Inflation Challenge
Inflation has climbed to 3.3%, outstripping the Bank of England’s earlier forecasts. This surge is largely driven by conflict in the Middle East, which has disrupted energy supplies and pushed up fuel costs.
The BoE is watching the knock-on effects of ongoing geopolitical tensions closely. As businesses raise prices and workers seek higher wages to cover their own bills, the BoE may feel compelled to raise interest rates further to dampen demand.
The BoE meets eight times a year to assess interest rates, with its end-of-April decision coming at a particularly volatile time for the global economy.
With the next MPC meeting scheduled for 18 June, the possibility of a “forceful” rise remains on the table. For landlords, this shifts forward-planning for remortgaging into the spotlight.
Stability vs. Volatility
The MPC’s primary mandate is to bring inflation back to its 2% target. While they cannot control global energy prices, they can control the cost of borrowing. If energy-led inflation begins to embed itself into the domestic economy, the era of 3.75% may be short-lived.
For landlords with properties on variable rates or those with fixed terms ending in 2026, the current interest rate freeze is less a sign of recovery and more a call to action to review financing strategies before the summer.
Interest Rates Hold Gives the Market Breathing Space
April resilience should continue, but summer will depend on what the Bank signals next
Kevin Shaw, National Sales Managing Director, from LRG shares his commentary to the news:
Today’s decision to hold interest rates is the news many buyers, sellers and agents were hoping for. It does not remove uncertainty from the market, but it does remove an immediate threat. The Bank had a difficult decision to make against an unusually unsettled backdrop. The on-off ceasefire in Iran is changing by the day and the interest rate outlook has turned turtle in a remarkably short period: just two months ago we expected two interest rate cuts; since the war in the Middle East began, two rises over the course of the year appeared a likely scenario.
The important point is that the situation looks less fragile than a month ago. Assuming the Middle East situation does not escalate, today’s hold suggests some easing of concern around the path of rates for the rest of the year. The fears of further rises being discussed in early March now feel less certain.
From LRG’s perspective, the property market has remained resilient. Buyer activity and sales held up well throughout April, instructions are 5% higher and we are continuing to see momentum despite the wider uncertainty. Today’s decision should help sustain that confidence.
That said, the risk remains. The next Monetary Policy Committee meetings on 18 June and 30 July now become particularly significant. Much will depend on inflation, employment and whether global events continue to feed through into energy prices and household costs.
The concern is that a rise later in June or July could coincide with the market entering its quieter summer season. As property professionals heave a sigh of relief today, they must also think ahead to how a future rise will impact. But for now, a hold gives the market room to keep moving.
Next Steps for Landlords
In today’s market, where interest rates are likely to rise before the end of the year, seeking professional mortgage advice is a great way to prepare your property portfolio for rising costs.
The National Landlord Investment Show will be in Birmingham (20 May), London (8 July), Bristol (30 September), Manchester (14 October) and then back to London for our final show of the year on 28 October 2026.
Register for your free tickets here and ensure your portfolio is resilient enough to weather the global economic storm.
If you can’t make the show in person, why not join the LIS Community, the UK’s fastest-growing landlord network? You’ll get access to exclusive content, webinars, videos and more and the best part – it’s completely free.
