The Bank of England has reduced the Bank Rate to 3.75%, down from 4%, the lowest level in nearly three years. The decision, published on 18 December 2025 after the MPC meeting ending 17 December 2025, signals a shift towards lower borrowing costs and, for the property market, that usually means fresh momentum for both buyers and sellers.

For the official announcement and detail behind the decision, see the Bank of England’s summary and minutes here: Bank of England, Monetary Policy Summary and Minutes, December 2025. For a plain-English breakdown of what it can mean for mortgages and savings, this guide is helpful: MoneySavingExpert, what the base rate cut means.

Why this rate cut matters for the London property market

Interest rates influence mortgage pricing, buyer affordability, and overall confidence. So, when the Bank Rate falls, we often see three things happen more quickly in London:

More buyer enquiries, because monthly repayments can improve and lenders compete harder.
More sellers testing the market, especially homeowners who paused plans during higher-rate periods.
A smoother chain market, because confidence returns and transactions feel less fragile.

What buyers should do next

Lower rates do not automatically mean lower property prices, but they can improve your options and your negotiating position.

Review your budget and mortgage options
If you are on a tracker, you may see the benefit sooner. If you are on a fixed rate, your change usually arrives when your deal ends, however new fixed-rate pricing can improve as expectations shift.
Move quickly on the right property, not just any property
When rates fall, competition tends to rise. Therefore, it helps to focus on areas and property types that match your long-term plan, not just the monthly payment.

Browse current opportunities here: Primeland Property, Properties for Sale.

What sellers should do next

If you have been waiting for improved sentiment, this is a sensible moment to plan your next move.

Get a pricing strategy that reflects today’s buyers
Buyers are still value-driven, yet they respond well to homes that feel well presented, well located, and realistically priced.
Time your launch to capture fresh demand
A rate cut often creates a wave of new enquiries in the weeks that follow. If your property is ready, you can take advantage of that early momentum.

Start with a no-obligation valuation here: Primeland Property, Request a Valuation. If you want a step-by-step overview of the selling process, use this guide: Primeland Property, Vendors Guide.

Landlords and investors, the opportunity is shifting too

Lower borrowing costs can improve buy-to-let maths, particularly when you combine the right rent level with professional management. At the same time, tenant demand in London stays strong, especially in well-connected areas across East London and beyond.

Explore rental demand and available homes here: Primeland Property, Properties to Rent. For a deeper look at landlord services, see: Primeland Property, Landlords Guide.

FAQs

Will mortgage rates drop immediately?
Tracker rates often follow quickly. Fixed rates depend on lender pricing and expectations, so changes can be gradual.

Is this a good time to buy in London?
It can be, because improved affordability often increases choice and confidence. However, the best time is when your finances, deposit, and timeframe align.

Is this a good time to sell?
It can be, because more buyers re-enter the market when borrowing costs ease. Strong presentation and smart pricing still matter most.