Property Expert Sees Green Shoots for 2026 Following Bank of England Rate Cut

The Bank of England has cut interest rates from 4% to 3.75% today in what Governor Andrew Bailey has signalled is the beginning of a “gradual downward path.” The decision, passed by a narrow 5-4 vote, reflects growing economic headwinds even as inflation remains stubbornly above the Bank’s 2% target at 3.2%. The property market, which has endured two years of severe strain under elevated rates, will be watching closely.
For the sector, this cut is significant. Borrowing costs are now at their lowest in nearly three years, offering genuine relief to buyers who have been locked out by affordability constraints and sellers stuck in a low-confidence holding pattern. The Bank’s forecast that inflation will hit target by spring or summer 2026, ahead of previous expectations, suggests the cutting cycle has more runway.
Property expert Jonathan Rolande, founder of House Buy Fast, sees the decision as a turning point for market sentiment and activity levels.
“This cut is very welcome,” said Jonathan. “A booming property market does not serve most people’s needs, and this reduction will help stem the growing lack of confidence in buying property as an investment and as a home. Without a boost to sentiment, the market was in danger of a spiral ever downward, and that also would not serve the needs of most.”
However, Jonathan cautions against reading too much into a single cut. The real impact will depend on whether further reductions materialise as Bailey has suggested. The narrow voting margin reflects genuine divisions within the Monetary Policy Committee about how much further to go, given that inflation remains well above target and consumer caution is widespread despite the festive season.
Structurally, the property market faces persistent challenges. The shortage of homes remains acute, and affordability gaps between earnings and house prices are still substantial. But underlying demand has not disappeared. Life continues: people relocate for work, families expand, inheritances trigger downsizing, life changes force upsizing.
“A calmer market is actually healthier for most people,” Jonathan explained. “When you’re not fighting panic buying or spiralling prices, buyers and sellers can actually negotiate and make transactions happen. I’m expecting to see that shift quite distinctly in the year ahead, but only if the rate cuts continue and sentiment genuinely stabilises.”
For 2026, the property sector faces a critical moment. If the Bank follows through on rate cuts as Bailey indicated, combined with inflation trending towards target, the conditions for genuine market recovery exist. If cuts stall or reverse, the sector will slip back into the caution that has defined 2025. Jonathan is optimistic the former scenario will prevail, but the narrow BoE vote serves as a reminder that the path ahead is far from certain.