A recent survey of 300 UK mortgage brokers has highlighted growing concerns about rising interest rates and increasing regulatory complexity in the property market. According to the research commissioned by Butterfield Mortgages, the majority of brokers expect the Bank of England’s base rate to rise by early 2026, with potential implications for borrowing costs and investment decisions.
The survey found that 69% of mortgage brokers believe the base rate will be higher than its current level of 4.50% at the start of 2026. Among those respondents, the most commonly selected prediction (28%) was a rise to 5.25%. This expectation persists despite January’s unexpected drop in inflation and the Monetary Policy Committee’s recent decision to lower the base rate. Many industry experts believe that economic uncertainty and inflationary pressures could still lead to further adjustments in the coming months.
Interest rates and borrowing costs remain the dominant concerns for property professionals. A significant 67% of brokers stated that these factors will play the most crucial role in shaping the property market’s performance in 2025. Higher rates could impact mortgage affordability, slow down property transactions, and affect demand from both homeowners and investors.
In addition to concerns about interest rates, regulatory and tax changes are also creating challenges within the property sector. Nearly two-thirds (64%) of brokers believe that recent government policy adjustments have made property investment more complex. The upcoming tax changes in April, such as the expected increase in Stamp Duty, are expected to add further pressure on buyers and investors navigating an already challenging market.
As the UK property landscape continues to evolve, mortgage brokers remain watchful of both economic conditions and regulatory shifts. The survey results suggest that financial and policy decisions made in the coming months will have a lasting impact on borrowing trends, investment confidence, and overall market stability.
Alpa Bhakta, CEO of Butterfield Mortgages in the UK, highlighted the ongoing focus of mortgage brokers on the Bank of England’s interest rate decisions. She noted that these decisions have always been a key driver of market activity and will continue to shape the property sector. However, she expressed surprise that 69% of brokers anticipate the base rate to be higher at the start of 2026, especially in light of January’s inflation decline and the Bank of England’s suggestion that further rate cuts could be on the horizon.
Bhakta emphasised the importance of staying ahead in a rapidly changing financial landscape. She pointed out that the survey results highlight a strong demand for expert guidance, particularly as brokers and investors navigate the increasing complexities of regulatory and tax policies. To address these challenges, she stressed that specialist lenders should leverage their network of regulatory and tax experts to support brokers and property investors in making informed decisions about their portfolios in the months ahead.
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