A new survey commissioned by Butterfield Mortgages has revealed that a significant majority of mortgage brokers expect the Bank of England’s base rate to rise again by January 2026.
The findings suggest that brokers foresee ongoing market challenges, with regulatory complexity also expected to increase over the coming year.
The survey of 300 mortgage brokers found that 69% believe the base rate will be higher than its current level at the start of 2026. The most commonly selected prediction, chosen by 28% of respondents, was a rise to 5.25%.
These expectations come despite a surprise drop in inflation in January and the Bank of England’s recent decision to cut the base rate at its latest Monetary Policy Committee meeting. The data underscores concerns about borrowing costs, with 67% of brokers identifying interest rates as the most important factor influencing the property market in the year ahead.
Brokers are also closely watching government policy on property regulations and taxation. With changes expected in April, including an increase in Stamp Duty, 64% of respondents said that the property investment landscape has become more complex to navigate.
Alpa Bhakta, CEO of Butterfield Mortgages in the UK, said: “It’s no surprise that most UK brokers remain focused on the Bank of England’s interest rate decisions — these have long been, and will continue to be, the key driver of market activity.
“However, it is surprising that 69% of brokers expect the base rate to be higher at the start of 2026, especially given January’s decline in inflation and the Bank of England’s indication that further rate cuts could follow.
“This underscores the need for lenders to stay ahead of the curve. Our research points to a clear demand for expert guidance in navigating the increasingly complex regulatory and tax landscape. Specialist lenders must utilise their network of regulatory and tax experts to help brokers support property investors to make confident decisions about their portfolios in the coming months.
“While market conditions have shown some signs of improvement, it’s clear that brokers and lenders must collaborate closely. Together, we can address the challenges ahead and ensure the property market remains resilient in 2025 and beyond.”
