Bank of England Keeps Rates The Same
Date Published 19 June 2025
**Bank of England Holds Interest Rates Steady – Good News for Housing?**
**June 19, 2025** – The Bank of England's Monetary Policy Committee has voted 6–3 to hold the base interest rate at 4.25%, signaling cautious optimism for the economy. While inflation remains above target at around 3.4%, central bank officials pointed to easing price pressures and weakening GDP growth—down 0.3% in April—as reasons to pause.
Governor Andrew Bailey noted signs of a 'gradual downward path' for rates amid softening labor markets, yet flagged global uncertainties like energy price spikes and geopolitical tensions.
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**What This Means for the Housing Market**
**Mortgage Cost Stability**
Since mortgage rates for many fixed and tracker deals are linked to the Bank Rate, keeping it unchanged brings welcome relief for homeowners and prospective buyers. Experts note better mortgage rate visibility as 'mortgage rates are close to peaking.'
**Buyer & Seller Confidence**
* Rightmove reports that June asking prices fell 0.3% month-on-month—a typical seasonal dip—but remain 0.8% higher than a year ago, indicating resilience.
* Zoopla's Richard Donnell highlights that even with higher borrowing costs, in many areas it's still cheaper to buy than rent, helping sustain market activity.
**Positive Outlook for 2025**
* Rightmove forecasts a busy 2025, with asking prices expected to rise around 4%, and up to 1.15 million transactions — suggesting a shift toward a buyer-friendly market.
* As mortgage rates stabilize and future rate cuts become more likely, buyer affordability and transaction volumes are poised to improve.
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**Industry Voices & Expert Takeaways**
'Investors will certainly have hoped for a rate cut today, but persistent inflation and other economic indicators have made … a rate hold increasingly likely… there remains a real possibility that we'll see the base fall later this year.'
– Alpa Bhakta, CEO, Butterfield Mortgages
'Higher mortgage rates don't have the same impact across the housing market so the outlook depends on where you live… mortgage rates for fixed-rate deals are close to peaking.'
– Richard Donnell, Executive Director of Research, Zoopla
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**Why Especially Positive for Homebuyers**
1. **Mortgage predictability** – Holding rates adds stability, helping buyers budget with confidence.
2. **Signs of potential future cuts** – Markets are now anticipating rate reductions later this year.
3. **Healthier market conditions** – Rising transactions, seasonal pricing, and narrowing mortgage spreads all support sustained buyer demand.
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**Bottom Line**
Today's decision to keep the base rate at 4.25% keeps the status quo—a win for those hoping to avoid another jump in mortgage costs. With inflation gradually cooling and central bank rhetoric leaning toward rate easing, the housing market is well-positioned for a steady summer—and potentially stronger activity into 2025.
**Stay tuned**: As inflation trends and global conditions evolve, the Bank of England may well take action before year-end—and when it does, the housing market looks ready to benefit.
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