Right now, it looks like house prices are likely to hold steady. But there’s one big moment everyone is watching…. the Bank of England’s interest rate decision on 19 March.
If, as currently forecast, the headline rate is trimmed by 0.25 per cent to 3.5 per cent, the market could get the boost it’s been waiting for.
At the last meeting, the rate was held at 3.75 per cent, but only just. It was a tight vote, with four members of the Monetary Policy Committee backing a cut and five opting to keep rates where they are.
That narrow split tells us a lot: the direction of travel is finely balanced.
Looking ahead to next month, analysts are expecting another close call, but this time tipping in favour of a reduction. The reasoning? Inflation is forecast to continue edging downwards, and energy prices are expected to fall in April.
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Inflation is forecast to continue edging downwards, boosting buyer confidence
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Inflation is still above the official 2 per cent target, but it’s projected to be much closer to that level by April. Of course, any unexpected shift, even a small one, could disrupt those expectations. With opinion so divided, it wouldn’t take much to change the outcome.
That said, if a cut does materialise, it could inject some much-needed energy into what is currently a fairly flat market.
Cost-of-living pressures, affordability concerns and ongoing political uncertainty are still causing many buyers to pause before committing.
Without a rate cut, 2026 could feel underwhelming from a housing perspective. But never underestimate the power of optimism.
Spring itself could play a role. After a long, wet and dark winter, brighter weather tends to lift confidence and enquiry volumes. With the clocks going forward on 29 March, there’s often a noticeable shift in mood that translates into market activity.
Flats remain in the doldrums.
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Concerns over service charges, uncertainty around leaseholds, and lingering cladding safety issues continue to weigh on buyer confidence, and this trend looks set to persist for now.
In London, prices should improve from their current low base. However, the high-end market is expected to remain largely flat for the year.
Elsewhere, the outlook appears healthier. The North-East of England, in particular, looks set to continue its growth trajectory, outperforming other regions.
There’s also movement in the rental sector.
The upcoming Renters Rights Bill, due to take effect on 1 May, is prompting many ‘mum and dad’ landlords to complete sales before the legislation comes into force.
In London, prices should improve from their current low base
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The result? A likely reduction in rental stock, and potentially a small increase in rents ahead of the deadline.
In summary, March could prove pivotal. A rate cut may be the catalyst the market needs, but even without one, seasonal optimism and regional resilience could help steady the ship.
Property expert Jonathan Rolande is the founder of House Buy Fast. For more information visit www.jonathanrolande.co.uk.
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