BoE Base Rate & Local Housing Market Update

Market Update – September 2025

Base Rate held at 4% and local housing activity on the rise

At Willmott & Lake we’re always keeping a close eye on the housing market and wider economic trends, so we can give our clients the clearest possible advice. We’re based in Bishop’s Stortford, but we also cover surrounding villages and towns including Takeley, Elsenham, Stansted Mountfitchet, the Hallingburys, the Hadhams and Great Dunmow, to name just a few. We’ve noticed some positive activity this month as the market picks up after the school holidays.

Bank of England holds Base Rate at 4%

The Bank of England has kept the Base Rate at 4% this month, following a 0.25% cut at the previous meeting in August.

The Bank continues to balance bringing inflation closer to its 2% target with maintaining a healthy wider economy. Inflation currently remains at 3.8%, much lower than the highs seen in 2022 but still high enough to influence the Bank’s cautious stance on when and how much to lower the Base Rate.

At present, many forecasters expect we might not see another Base Rate cut until early 2026, although this could change depending on how the wider economic picture develops.

Mortgage rates showing stability

For much of the past two years, two-year fixed rate deals were significantly more expensive than five-year fixed rates, sometimes by as much as 0.5%. This gap has now narrowed dramatically and, on average, two-year rates are currently slightly cheaper than five-year rates.

Average mortgage rates have dropped compared with last year:

• Five-year fixed rate down from 6.08% (July 2023) to 4.56% this week

• Two-year fixed rate down from 6.61% to 4.53% this week

Our local perspective

Here on the ground, we’ve noticed activity bouncing back after the school holidays. We’ve already agreed 10 sales so far this month, across a mix of homes in Bishop’s Stortford and the surrounding villages and towns we cover. This indicates there’s still strong demand from serious buyers who are ready to move, even with mortgage rates at their current levels.

What does the Base Rate hold mean for your current mortgage?

• If you’re on a fixed-rate deal, your monthly payments will remain unchanged until your deal ends.

• If you’re on a variable or tracker mortgage, this month’s Base Rate hold means your monthly payments remain the same for now.

If your fixed-rate mortgage is due to end soon, it’s worth checking what rates might be available on your next deal and considering your options in advance. Talking to a broker or lender early can help you secure a deal and avoid automatically moving onto your lender’s Standard Variable Rate – which currently averages around 7.14%.

A reminder about the Mortgage Charter

Introduced in July 2023, the Mortgage Charter was designed to help borrowers who are struggling with monthly payments, as well as those approaching the end of their fixed-rate period. It allows borrowers to lock in a new deal up to six months before their current rate ends. Borrowers can also look at remortgaging to another lender, though this can take longer due to standard lending checks and legal processes.

When could interest rates fall?

The Bank of England’s Monetary Policy Committee meets every six weeks to review and decide on the Base Rate. Historically, after periods of rate increases, rates tend to plateau before starting to fall gradually. Current predictions suggest we may not see another reduction until early 2026, but this could shift depending on economic conditions.

The next decision on interest rates is scheduled for 12pm on Thursday 6 November 2025.

Our view

Despite the headlines, our local market across Bishop’s Stortford and the surrounding villages and towns — including Takeley, Elsenham, Stansted Mountfitchet, the Hallingburys, the Hadhams and Great Dunmow — is proving resilient. We’re seeing good levels of enquiries, a steady flow of new instructions, and strong interest from buyers who are well-prepared to move.

If you’re thinking of selling in our area, now can be a great time to discuss your options. Our experienced team can give you a free valuation and guide you through your next steps with clear, honest advice.