October snapshot

  • The Bank has held the base rate at 4% for now, citing stubborn inflation.
  • Mortgage rates are meaningfully lower than a year ago, improving affordability for many buyers.
  • Official house price data shows modest ongoing growth, while timely indices suggest seasonal caution.
  • Mortgage approvals are rising again, suggesting healthy underlying demand.

Base rate continues to be held before next decision

The Bank of England’s Monetary Policy Committee (MPC) chose to hold the base rate at 4% at its 18 September meeting. While two members still preferred a cut, the majority voted to keep it unchanged, holding firm as they wait for more economic data.

The reason for the continued restraint is persistent inflation. Headline CPI was 3.8¹ in September, from August and July, keeping it almost double the Bank’s 2% target.

Looking ahead, the MPC is set to announce its next decision on Thursday, 6 November. Market predictions for this meeting are split: some anticipate a hold to allow policymakers to wait for clarity from the Autumn Budget, while others believe the Bank will proceed with a cautious cut. The outcome will depend entirely on the latest data.

What this means for you

  • The Bank’s continued hold on the base rate provides stability, giving homeowners a clear outlook on their immediate borrowing costs.
  • With inflation stubborn, the Bank is delaying further cuts. Lenders will be hesitant to drop fixed rates aggressively until the 6 November meeting provides a clearer policy signal.

Mortgage rates are continue descending

Average fixed mortgage rates have maintained a modest downward trajectory over the last month. Rightmove’s tracker shows the average two-year fixed rate now stands around 4.47%, slightly lower than September and representing a substantial affordability improvement compared to a year ago.

What this means for you

  • The steady decline in rates is welcome news, reinforcing that the general direction of travel for borrowing costs is positive.
  • If you’re looking to buy soon, the current rates offer better value than last year, making it vital to shop around now and compare deals with the help of a broker.

House prices: official data confirms resilience

The market remains complex, showing strength in completed sales but caution in asking prices.

  • The UK HPI (Land Registry, August 2025) – The most comprehensive and official measure (August 2025 data) confirms resilience. Prices rose 0.2% month-on-month (seasonally adjusted), with the average UK house price now around £273,000. Annual growth remains modest at 3.0%.²
  • Nationwide House Price Index: Mortgage lenders’ own data shows prices rose 0.3% month-on-month in October, suggesting stability is being maintained despite high interest rates.³
  • Asking price indicators (Rightmove): Asking prices saw a modest +0.3% rise in October – a smaller increase than the typical autumn market bounce. This indicates that while demand is still there, buyers have more leverage due to the high number of properties for sale.⁴

What this means for you

  • Don’t be misled by headlines about price drops: official data shows prices for completed sales are still climbing modestly.
  • The current increased property choice creates crucial negotiation opportunities, particularly in a market where sellers know buyers have options.

Mortgage approvals and activity dip slightly

Mortgage approvals for house purchases increased again in September, hitting 65,900 approvals.⁵ This is the highest level since December 2024 and marks the third consecutive monthly increase. This sustained activity suggests that buyer demand remains healthy and is gradually strengthening.

What this could mean for you

  • Buyer confidence is high: Rising approvals reinforce that more buyers are successfully navigating the lending criteria and moving forward with purchases.
  • The consistent increase in activity suggests the market is solid, so being prepared positions you well to seize opportunities as they arise.

Policy rumblings: property tax talk continues

Speculation about changes to property taxes (including possible Stamp Duty reforms, regional tax changes like Council Tax overhauls, and the potential introduction of a ‘Mansion Tax’) remains persistent in the background as the government prepares for the Autumn Budget on 26 November.

Rumours are also circulating about changes to Capital Gains Tax and National Insurance for landlords. Policy changes can significantly influence market behaviour – especially among higher-value transactions – so it’s something to keep an eye on if you’re planning a move. See our previous explainer on the possible scenarios if you want a quick breakdown.

Our top tips

If you’re saving for a first home: keep building your deposit, check Lifetime ISA rules (remember the 25% government bonus and withdrawal rules), and get a Mortgage in Principle when you’re close. Being ready matters when market windows open.

A 25% government penalty applies if you withdraw money from a Lifetime ISA for any reason other than buying your first home (up to £450,000) or for retirement, and you may get back less than you paid into your Lifetime ISA.

Tax treatment depends on individual circumstances and may be subject to change in the future.

Remember: if you opt for the Stocks & Shares LISA, you’ll be investing, so your capital is at risk. All investing should be long term. The value of your investments can go up and dow

Your home may be repossessed if you do not keep up repayments on your mortgage.

1 Source: Office of National Statistics (ONS) CPI Annual Rate of Inflation
2 Source: GOV.UK Land Registry (UK House Price Index for August 2025)
3 Source: Nationwide House Price Index for October 2025
4 Source: Rightmove House Price Index for October 2025
5 Source: Trading Economics, UK Mortgage Approvals for September 2025