What the 4.5% Rate Means for Property Buyers

The Bank of England has voted to maintain the base rate at 4.5%, citing ongoing inflationary concerns, particularly within the services sector. While hopes for an early 2025 rate cut have been delayed, the decision signals a steady approach to monetary policy as inflation continues to edge down.

For property investors, the hold reinforces a stable backdrop. Mortgage rates have eased from last year’s highs, and demand remains strong in key regional cities, particularly in areas supported by affordability, regeneration, and rental growth.

Key Takeaways

• The Bank of England kept interest rates at 4.5% in March 2025.
• As of February 2025, UK core inflation stands at 3.5%, down from 3.7% in January, although CPI services inflation remains elevated at 5.0%.
• The average five-year fixed mortgage rate at 60% LTV is 4.20% as of March 26, 2025, with higher rates for larger LTVs.
• Regional investment hotspots like Manchester, Liverpool, Birmingham and outer London continue to deliver strong rental yields and growth potential.

A Stable Environment for Strategic Investment

The Bank’s decision to pause rate changes rather than hike further offers reassurance to borrowers and investors alike. While inflation remains above target, the likelihood of additional increases appears to be fading, with many analysts forecasting cuts in the second half of the year.

Lenders are already responding. As of March 2025, the average two-year fixed mortgage rate at 60% loan-to-value (LTV) is 4.20%, while Barclays is offering a five-year fixed rate for home buyers at just 3.84% for the same LTV. These improved rates are creating a more accessible environment for property buyers and investors alike.

Key Cities Leading the Way

While national averages tell one story, specific regional markets are outperforming. Cities like Manchester, Liverpool, Birmingham and parts of London continue to see strong demand thanks to a combination of infrastructure investment, growing populations, and healthy rental markets.

• Manchester remains a top performer, driven by continued investment in regeneration and a thriving rental sector.
• Liverpool benefits from strong affordability and growing demand from both students and professionals.
• Birmingham is being transformed by major infrastructure projects and a younger demographic pushing up rental demand.
• In London, outer zones and regeneration corridors are offering more accessible entry points for investors, especially with rental yields strengthening.

How Rothmore Property Supports Your Investment Goals

At Rothmore Property, we specialise in sourcing investment opportunities in London, Manchester, Liverpool and Birmingham, four of the UK’s most dynamic property markets. With over 60 developments in prime, high-demand locations, we offer investors access to properties with strong long-term growth prospects and high rental yields.

Whether you're taking your first step into buy-to-let or expanding a seasoned portfolio, our team provides tailored support from strategy to completion, including financing, conveyancing, and property management.

Positioning for Growth in 2025

While interest rates may remain on hold for now, the broader picture for property investors is positive. Stabilising mortgage rates, strong regional fundamentals, and growing rental demand all point to a favourable climate for long-term investment.

Focusing on high-performing cities like London, Manchester, Liverpool and Birmingham gives investors access to strong yields and sustainable capital growth, especially for those who act ahead of the next interest rate shift.

Contact our team today to explore our latest developments and start planning your next investment move.