Bank of England Governor Andrew Bailey has declared that interest rate cuts are “off the table,” delivering a blunt message to a property market that had been quietly hoping for relief before the summer ends.
“There was an expectation that we would cut rates this year,” Bailey said. “That was off the table in March, and it’s off the table at the moment.”
The statement leaves no room for ambiguity. After the Bank’s Monetary Policy Committee voted 7-2 to hold the base rate at 3.75% for a fourth consecutive meeting last month, many in the industry had still clung to the possibility of movement before autumn. That possibility now looks remote at best.
The core problem hasn’t changed. Inflation sits at 2.8%, stubbornly above the Bank’s 2% target. While that figure is at least lower than in previous months, it isn’t falling fast enough to give the MPC the confidence it needs to loosen monetary policy.
Bailey offered one small consolation: he confirmed he hasn’t voted for a rate increase this year. That’s worth noting only because it could have been worse. With two MPC members already voting against the hold, the pressure to raise rather than cut remains a live possibility if inflation ticks upward again.
The next MPC meetings fall at the end of July and in September. Neither now looks likely to produce a cut.
For property owners across Norfolk and Suffolk, this creates an unusual tension. Commercial lenders have been cutting fixed mortgage rates aggressively in recent weeks, with some two-year fixes now available below 3.5%. Five-year products have fallen to levels not seen since early spring.
Yet the base rate sits unmoved at 3.75%, and the Governor has made clear it’s staying there.
The disconnect matters because it can’t last indefinitely. Lenders are competing for market share by trimming margins, but their room to manoeuvre narrows if swap rates shift or if the Bank signals a prolonged hold. Buyers who secure today’s fixed rates may find they’ve locked in at a favourable moment. Those waiting for a base rate cut before acting could be waiting well into 2027.
Bailey’s caution doesn’t exist in a vacuum. The effects of conflict in the Middle East continue to weigh on global markets, pushing up energy costs and feeding into the inflation figures the Bank watches most closely.
Closer to home, speculation around Andy Burnham’s expected arrival in Downing Street has introduced fresh nervousness. Burnham’s team has floated the idea of replacing council tax and stamp duty with a single annual property levy, a reform that would fundamentally reshape how homes are taxed in England.
Nothing is confirmed. But the mere prospect of a property tax overhaul is enough to make some buyers and sellers hesitate, adding another layer of friction to a market that was already proceeding with caution.
The practical implications are straightforward. Mortgage rates aren’t going to fall dramatically from here, because the base rate floor isn’t dropping. Sellers in Norwich, Wymondham, and across the region’s market towns shouldn’t expect a surge of newly affordable buyers to appear in the autumn.
That doesn’t mean the market is stalling. Transactions are completing. Mortgage products are competitive. But the era of sub-1% base rates isn’t coming back, and pricing strategies need to reflect the reality that most buyers are now working with borrowing costs between 3.5% and 5.5%.
For those selling premium properties in sought-after locations like Holt, Burnham Market, or the Suffolk coast, the buyer pool remains active. Cash buyers and those with substantial equity are less sensitive to base rate movements. The properties that are priced correctly, presented well, and brought to market with proper strategy continue to sell.
Bailey’s intervention is really a reminder that the property market now operates in a different economic environment from the one that prevailed between 2009 and 2022. Base rates of 3.75% aren’t high by historical standards. They’re roughly where rates sat for much of the early 2000s, a period most people remember as perfectly normal for buying and selling homes.
The adjustment is psychological as much as financial. A generation of homeowners grew accustomed to rates below 1%, and many assumed that was the permanent baseline. It wasn’t. Bailey’s comments this week confirm that the Bank sees the current level as appropriate and isn’t in any hurry to change it.
The autumn market will arrive without the stimulus of a rate cut. That shifts the emphasis onto other factors: the quality of individual properties, the accuracy of pricing, the strength of local demand in specific postcodes. Ivybridge’s 324 location-specific property market reports across Norfolk and Suffolk show that conditions vary enormously from one town to the next, and blanket assumptions about “the market” rarely hold.
For now, Bailey has given the market clarity, even if it isn’t the answer many wanted to hear. Rate cuts aren’t coming this summer. They may not come this year. The sooner sellers and buyers adjust their expectations to that reality, the more effectively they’ll operate in the market as it actually is.
