On 5 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 within our local property markets in Bath and the surrounding villages.
The message from policymakers remains consistent: interest rates are expected to move along a gradual downward path, rather than fall sharply in the short term.
How Interest Rates Have Changed Over the Last Two Years
To put this decision into context, it is 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 their historic lows, lenders have become more competitive, pricing in expectations that the next movement is more likely to be down than up. We are generally hearing of buyers securing mortgage rates around the 4% mark.
February 2026’s decision reinforces that shift, signalling that the period of sharp volatility has eased and that a more predictable, measured phase may now lie 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 currently renting are now looking to purchase, and in January this year we agreed more sales than we did 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. As a result, buyers are still often finding themselves competing for the properties they like.
For buyers, this is less about trying to time the bottom of the market and more about securing the right property while competition exists, but remains relatively balanced. A few years ago, there were far more highly 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 helps support 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 home should sit by interpreting recent house price data, the number of buyers looking for a particular type of property, and what else is currently available on the market.
Well-presented homes that are priced correctly and marketed effectively should attract strong interest, especially family houses and period properties. For apartment sellers, we are also seeing sales continue, despite some landlords choosing to sell as legislation and tax rules reduce the appeal of investment property.
As confidence continues to improve, and if borrowing costs gradually decline, sellers should benefit from 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 who bought over the past five years, mortgage deals will be coming to an end. This is often an ideal moment to review mortgage options, reassess future plans, or consider whether a move could help achieve lifestyle and financial goals.
In Conclusion
February’s decision marks another step away from uncertainty and towards greater stability. When change is unlikely to be sudden, the direction of travel becomes clearer — and that 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.
