A Base Rate hold was what we wanted, right? So why the hawkish headlines?

For months, anyone with half an eye on the property market has probably had a fairly simple relationship with Bank of England interest rate announcements.

A cut is good. A rise is bad. And, if we can’t have a cut, a hold will do nicely.

That is, of course, an oversimplification of a complex economic mechanism. But for landlords with mortgages, particularly those approaching refinancing, it is not a bad shorthand for the way interest rate decisions tend to be received.

So, when the Bank of England elected to keep Bank Rate unchanged at 3.75% at its September meeting, it might reasonably have looked like welcome news.

No increase, and a little more stability for a little longer. No?

Well, perhaps not. The reaction afterwards has been notably less comfortable.

Much of the commentary has focused on market concern, rising inflation, the possibility – or perhaps, probability – of a rate rise at the next meeting, and a more “hawkish” tone from the Bank of England.

So what happened?

The answer is that the decision to hold Bank Rate is only one part of the story. For landlords in South West London, what financial markets think might happen next can be just as important.

A hold, but not necessarily a comfortable one

On the face of it, not a lot changed.

The Bank Rate remained at 3.75%, and the 6-3 vote was the same as July – so it is not as if the vote got tighter.

But the debate and the narrative around the vote seems to have changed.

For much of the recent past, the conversation has centred on when borrowing costs might come down. The September decision was delivered with a clearer acknowledgement that rates may need to rise if inflationary pressures persist.

Energy costs are a significant part of that concern.

UK inflation reached 3.1% in August, and the Bank expects it to rise further during the coming months before potentially moving above 4% in early 2027.

That does not mean another rise in Bank Rate is inevitable. The Bank has not concluded that higher rates are a fait accompli, and uncertainty remains around how energy costs will feed through into wages, prices and the wider economy.

Nevertheless, financial markets are paying close attention.

It makes sense that landlords should pay attention too.

Bank Rate is not the same Mortgage Rate

Even though we all know better, people still tend to imagine mortgage pricing moving neatly alongside what the base rate does.

Bank Rate falls, mortgages get cheaper. Bank Rate holds, mortgage rates stay still. Bank Rate rises, mortgages become more expensive.

That doesn’t actually play out in reality, as lenders are constantly looking ahead and, for want of a better word, second-guessing what rates are likely to do.

Fixed mortgage rates are heavily influenced by financial markets and expectations about where interest rates are heading in future. Swap rates form an important part of that pricing process.

It means that lenders do not wait for the Monetary Policy Committee to make its next decision before adjusting products.

They are already trying to price what they think might happen next.

And that helps explain the apparent contradiction.

The Bank Rate may not have moved in September, but some landlords approaching refinancing could still find that the mortgage deals available to them are more expensive than they were expecting, based on forecasts and swap rate behaviour.

The hold itself is only part of the picture. Mortgage markets are already trying to price tomorrow.

What does this mean for landlords?

For landlords, the important question is not simply whether Bank Rate goes up or down at the next meeting.

It is what the financing of an individual property looks like now.

Any landlord coming towards the end of a fixed-rate mortgage are wise to start looking ahead, and perhaps up to 6 months ahead, to lock in rates that may go up.

There’s a real implication on mortgaged rentals. A property that produced a comfortable return when mortgages were on lower rates and therefore had lower monthly payments to make may look different when refinancing at today's rates. Monthly mortgage payments can rise considerably, while insurance, maintenance, compliance and management costs have also increased.

That inevitably puts pressure on margins – and this pressure has featured heavily in the lettings market narrative throughout 2026.

For some landlords, the numbers will still work perfectly well. For others, it may prompt a review of the property, the rent being achieved and whether the investment continues to fit their longer-term plans.

But one thing is worth resisting: making major decisions solely in the hope that mortgage rates will soon return to where they were several years ago.

They might fall. They might remain broadly where they are. And of course, they might rise further – and this is the concern currently being voiced by markets.

Inflationary pressure could mean that borrowing costs remain higher for longer, too, which adds to that picture.

There are simply too many moving parts for certainty – so we have to deal with probability instead.

The pressure does not stop with landlords

Higher financing costs are primarily a concern for property owners, but the effects can reach further into the rental market.

Landlords cannot set rents based on their mortgage cost – it doesn’t work like that. Market dynamics do dictate what a landlord can and can’t charge. Rents are ultimately constrained by what the local market will support and what tenants are both able and willing to pay.

Nevertheless, when financing costs rise at the same time as maintenance, insurance, taxation and regulatory costs, the economics of owning a rental property become more challenging.

Some landlords may seek higher rents where the market allows, within the realms of reason.

Others may decide not to expand their portfolios.

Some may choose to sell – and if there aren’t willing landlords waiting in the wings, those sales might look good to first time buyers, but ultimately not to tenants; lack of rental properties drives competition, and therefore pushes up rents.

That is why interest rate decisions are so relevant to the lettings market even when the Bank Rate itself does not move. The immediate commentary always seems to focus on residential sales; it shouldn’t do. The effect we see on the lettings market can be profound and long-lasting.

Stability still has value

There is another side to this story; a mirror to hold up to the reactive headlines we’re seeing.

A hold is still a hold.

And a hold does provide a degree of short-term stability.

For anyone considering refinancing, investing or reviewing an existing portfolio, the most sensible approach is not to attempt to predict every future Bank of England decision.

It is to understand the numbers that apply to the property today and note when the earliest dates are that you can reasonably review your existing deals and your portfolio.

What rent is realistically achievable and when is the next review date?

What finance options are actually available?

What are the ongoing costs?

What yield is the property producing?

Is your property or portfolio meeting the objectives you have for your investment – and what can be done if not?

Those questions are more useful than second-guessing yourself whether Bank Rate will move at the next meeting.

Plan and prepare, but don’t panic.

Don't put your property strategy on hold

Property investment doesn’t do perfect conditions – it merely teases you that they exist, occasionally.

When borrowing is cheap, property prices often rise and competition increases too.

When prices soften, finance may be more expensive.

When rents rise, it can mean other costs are rising too.

There is nearly always something in the market that could give an investor a reason to wait. Our job as agents and property managers is to make the best out of a prevailing reality.

To work with the conditions that actually exist.

For existing landlords, that means understanding the performance of each property and planning ahead for refinancing rather than waiting until a mortgage deal expires.

For prospective investors, it means stress-testing the numbers against realistic borrowing costs rather than assuming cheaper finance will arrive later.

And for anyone questioning whether a property still works as an investment, it means looking at the full picture: rent, yield, capital position, mortgage costs, taxation, maintenance and long-term objectives.

September's interest rate hold was, on the face of it, what many landlords wanted.

But as the reaction afterwards demonstrated, a “hold” does not mean everything else stands still.