Date Published 05 February 2026
On 5th February 2026, the Bank of England confirmed its decision to hold interest rates at their current level, opting for stability as inflation continues to ease. While some had anticipated an immediate cut, the decision has been broadly welcomed here within our local property markets in Bath and its surrounding villages. We see the message from policymakers remaining consistent: that interest rates are expected to move along a gradual downward path, rather than falling sharply in the short term.
How Interest Rates Have Changed Over the Last Two Years;
"To put this decision into context, it's worth looking at how far the market has already come. Over the past two years, interest rates rose rapidly as the Bank of England sought to curb inflation. This period saw borrowing costs increase significantly, bringing an abrupt end to the ultra low mortgage rates many homeowners had become accustomed to.
Since then, the pace of change has slowed. Throughout 2025, rates began to stabilise, and mortgage markets adjusted accordingly. While rates remain higher than historic lows, lenders have become more competitive, pricing in expectations that the next movement will be down rather than up. We are generally hearing of buyers securing mortgage rates averaging around the 4% mark.
February 2026's decision reinforces that shift — signalling that volatility is behind us and that a more predictable, measured phase lies ahead." Alex Bowater
What This Means for Buyers in Bath...
Locally, this stability has already had a noticeable effect.
In Bath, we are seeing renewed confidence from buyers who paused their searches during the period of rapid rate rises. Buyers in rented are looking to purchase. In January this year we have agreed more sales than in January 2025. With mortgage pricing now more consistent, many buyers feel better able to plan and commit — particularly in popular areas where high-quality homes remain in short supply - meaning buyers are still often finding themselves competing for the property that they like.
In conclusion for buyers, this is less about timing a bottom of a market and more about securing the right property while competition exists but is still relatively balanced where as a few years ago there were many more competitive bidding situations.
What This Means for Sellers?
For sellers in Bath and the surrounding villages, rate stability is a positive development.
Buyers returning with clearer expectations around affordability, supports good prices and sustained demand.
In a more balanced market, experienced and competent agents should be able to give you a clearer picture of where the value of your house should lie by interpreting recent house price data, number of buyers looking for particular property, and what else is available on the market at present. Well-presented homes, priced correctly and marketed effectively, should be attracting very strong interest — especially family houses and period properties. In addition for apartment sellers we are seeing sales despite landlords continuing to sell as legislation and tax rules reduce the appeal of having investment property.
As confidence continues to improves and if borrowing costs do gradually decline, sellers are benefiting from gradually increasing buyer momentum.
A Calmer Outlook for Homeowners.
Homeowners approaching the end of fixed-rate mortgage deals may still face higher repayments than in previous years, but the outlook is improving. With rates expected to follow a gradual downward path, there is reassurance that affordability pressures should soften over time rather than intensify.
For many Bath purchasers over the past 5 years mortgage deals will be coming to an end, and this is often an ideal moment to review mortgage options, reassess future plans, or consider whether a move is on the cards to achieve lifestyle and financial goals.
In conclusion
February's decision marks another step away from uncertainty and towards stability. When change is unlikely to be sudden, the direction of travel is clearer — clarity is helping confidence return to the market.
At Strattons & Partners, we combine national insight with a deep understanding of the Bath property market. Whether you are buying, selling, or planning ahead, we are here to offer clear, considered advice shaped by both local conditions and the wider economic picture. Get in touch to discuss your next move.
