HOLDThe Bank of England held the base rate at 3.75% on 18 June 2026. For London buyers and sellers, the headline number matters less than what lenders are doing: rates remain below their level two years ago, lenders are competing to lend, and the bigger opportunity often sits in the gap between what you sell for and what you negotiate on your onward purchase.
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So what does it mean for your move? James Stevenson, Managing Director of Sales at Foxtons, and Richard Merrett, Managing Director of Alexander Hall, give you the read from both sides of the market: sales and mortgages.
For tailored advice, speak to your Foxtons agent and Alexander Hall adviser. They've already been briefed.
What's happening in the mortgage market?
Mortgage pricing moves on far more than the base rate. Global events, UK political conditions and the next round of inflation news all feed into it. So does something most buyers don't think about: each lender's own appetite for new business on any given week.
The signal worth reading right now is that lenders want to lend. When that happens, pricing can be influenced as they compete to bring borrowers through the door. Most importantly, borrowing capacity at virtually every lender is higher than it was a year ago, which means the home you assumed was out of reach may not be.
Advice for first-time buyers
If there is one piece of advice for a first-time buyer in this market, Richard Merrett keeps it to four words: go and get advice.
"What we're seeing is better rates than people expect, and higher borrowing capacity than people expect. "
Richard Merrett, Managing Director of Alexander Hall
Most buyers walk into their first consultation with Alexander Hall braced for worse terms than they are actually offered. Borrowing capacity is up, and more lower-deposit products are available than you might expect. The picture on the ground is friendlier than the picture in the news.
Part of getting advice is understanding how a mortgage is built. For example, repayment and interest-only mortgages do different jobs, and the right one depends on your monthly budget and your plans for the years ahead:
| Repayment mortgage | Interest-only mortgage | |
|---|---|---|
| What you pay each month | Interest plus a portion of the loan itself | Interest only, so monthly payments are lower |
| The balance over time | Reduces steadily; the home is yours outright at the end of the term | Stays the same; the loan is repaid separately or when it suits you |
| Who it can suit | Buyers who want to own the home outright and build equity as they go | Buyers who want a monthly payment matched to their budget and a flexible plan to repay |
Note: Interest-only is not a way to avoid repaying your mortgage. As Richard puts it in the video, it sets a monthly payment attuned to your budget, with a clear plan to repay when the time is right.
Should you wait for rates to drop?
Waiting for the perfect rate feels sensible. In practice it rarely pays off. It is near impossible to predict the bottom. Plus, the buyers who hold back tend to find the same homes attracting more competition by the time they move.
There is a London twist worth knowing too. When confidence dips, the people who press on often find the door open wider. Sellers can be flexible, especially if they're factoring in savings on their onward move. That swing can outweigh anything the base rate is doing to your monthly payment, which is the part the headlines tend to miss.
What should buyers do right now?
1. Speak to an Alexander Hall adviser about your options
2. Get your Agreement in Principle in place before viewing
3. Sign up to My Foxtons so you hear about the right property the moment it's listed
How to price and present your home now
Now, your sale takes you further.
Instruct Foxtons as your sole agent, and when we sell your property, collect 20,000 Avios.*
Start your journey here.
The buyers in the market right now are the serious ones. They have a real reason to move and their finance is already lined up, so the offers that come tend to be genuine. The strength of that demand is showing in our own numbers: viewings completed at Foxtons this March were the second highest we have ever recorded, even with applicant enquiries down. Fewer tyre-kickers, more people who mean it.
That changes what good selling looks like. Present the property in its best light, clear the clutter and let the lifestyle of the home come through, because first impressions turn viewings into offers far more directly in a market like this one. A serious buyer decides quickly, and they decide on what they see.
Pricing is where a good strategy earns its keep. The right asking price depends on how quickly you want to move, where you are in your own search, where demand could be coming from and what comparable homes nearby are actually doing. The number to watch is feedback. If buyers love the property but offers are not landing, ask your agent what else those same buyers are viewing, look hard at the evidence, and resist any urge to make a rash move in either direction.
What should sellers do right now?
1. Book a valuation to know exactly where your property sits today
2. Price precisely according to the valuation: serious buyers reward accuracy
3. Once you instruct Foxtons, link your British Airways account on your My Foxtons account, so you can collect 20,000 Avios when we get it done for you.*
3. Get your team in place early, your agent, mortgage adviser and solicitor, so you're ready the moment an offer lands
4. Get your home tidy and paperwork in order quickly. Once we list, we move fast.
*T&Cs apply
The trading gap: where the real value sits
You're not alone if you've not heard of this term before, it's often overlooked by sellers. Let's break it down. Your asking price is one number. The 'trading gap' between what you accept on your home and what you negotiate on the one you buy next is, in a market like this, a more important number.
"The value in the move can quite often be what you can discount on your onward move."
James Stevenson, Managing Director of Sales
A seller who stays flexible on their own price is frequently in a far stronger position to push on the home they want next. Hold out for the last few thousand on your sale and you can lose far more than that on the purchase, or lose the onward home altogether. Get both moving together and the chain completes, which was always the goal.
Whichever side of the move you are on, the right first step is a conversation. Get a clear read on your numbers, your timing and your options, and you are ready to act when you need to be:
Source: This article draws on the expertise of James Stevenson, Managing Director - Sales at Foxtons, and Richard Merrett, Managing Director - Alexander Hall. Between them, they lead the teams responsible for thousands of London sales and mortgage arrangements each year, giving our clients a uniquely complete view of how rate decisions translate into real outcomes. If you have any questions about the article, ask a Foxtons expert.
Read the full transcript
RM: The Bank of England has just held the base rate at 3.75%. No real surprises here, but there's quite a lot going on in the market right now, and that's worth understanding before you make your next move.
JS: We're here in one of the beautiful show homes at The Brentford Project by Ballymore. We'll walk you through what lenders are actually doing, where buyer demand is heading this summer, and the moves worth making now while the market is steady.
JS: So Richard, base rate is obviously number one, but we all know that mortgage pricing moves on a lot more than that. What is actually happening in the mortgage market right now?
RM: So clearly rates are higher than they were as little as two months ago. However, they are still lower than they were two years ago. There's a lot of volatility in the market, and that's driven by the global situation, the UK political situation, and probably further news to come around inflation as well. However, it's also key to point out that some lender behaviour will drive pricing. That could be based around service, or around appetite. And what's very clear at the moment is lenders want to lend, and therefore we may see pricing come down as a drive to get more business through the door, particularly encouraging the purchase market.
JS: Considering the recent base rate announcement, if you were speaking to a first-time buyer today, what would be the single most important bit of advice you would give them?
RM: Go and get advice. Go and speak to an advisor. What we're seeing is better rates than people expect, and higher borrowing capacity than people expect. Virtually every lender in the market will lend, or potentially lend, a customer more money than they would as little as a year ago.
JS: We also speak to a lot of buyers who are waiting for the right market, or waiting for the right rate to come to the market. In a market like London, can that cost them?
RM: Yeah, absolutely. The hardest part of buying a home is finding the home. And people who put off waiting for the right rate climate actually risk greater competition, and therefore potentially missing out on the right home.
JS: What are the other variables, beyond just the rate you're paying, that maybe buyers don't know about?
RM: A lot of that comes down to the structure you approach it with. Very few people are buying perfection. Someone might come into the scenario thinking, "I've got a 25% deposit, I need to put that down." In actual fact, they may be better off putting down 15%, getting a rate that's not actually that much different, but then having the money in their pockets to do the work they want to the home, to make it the great place they've bought.
RM: When we talk about affordability, a lot of people look at what that means for how much you can borrow. Probably the key thing is how much you can actually afford to pay each month. And for many lenders now, they will allow mortgage terms to go beyond 70, because a lot of people are expected to work beyond 70. Having a repayment mortgage over a longer term could stretch out the monthly payments, making them cheaper in that first period.
RM: Beyond that, there's interest-only. This is becoming widely more acceptable again. My first mortgage was interest-only. Driven by the government and in turn the regulator, more lenders are offering more of these products. And the key point here is interest-only is not a means to not pay your mortgage. It's about setting a monthly payment better attuned to your budget, and then paying it off when it suits you.
JS: One other question I have: we often have buyers who have a relationship with their bank, and they sometimes think, "I've got a relationship with my bank, therefore the best rate and service I'll get is direct via the bank," when quite often that isn't the case. A lot of banks actually prefer to go via an intermediary. Why is that?
RM: A mortgage intermediary provides a great service. And what they do best, it's not all about rate. A mortgage advisor can assess both the material facts that drive what someone can borrow, and the more aspirational points around what product and what lender is suitable for them. And that's not always going to be your same bank. Beyond that, it's about the service. Getting a mortgage is not buying a home; getting a mortgage gets you from application to offer. What good brokers do is act for the buyer, guiding them from putting in an offer, through the mortgage application, all the way to completion and moving in. And then also looking beyond, how to protect their income should the worst happen. There's a lot more than just what's the best rate.
RM: Thinking about buyers when they're nervous about rates, what does that change about how a home needs to be priced and presented from an estate agent's perspective?
JS: I'll speak about presentation first. As you can see where we are here, presentation is so important to a buyer's first impressions when they come into a property, so present your property in its best light possible.
JS: Pricing is a strategy. Pricing can be determined by how long you want to take to move, and where you are in your own search. But the most important thing is, are you getting viewings through the door? What is the feedback from those viewings? Are buyers loving the property but you're just not getting that bite? Do you need to look at the comparables for what's selling? Speak to your estate agent, ask what other buyers are seeing. That may mean you have to make a price adjustment. But don't panic, don't make rash decisions, speak regularly with your estate agent, and look at the evidence in the market.
RM: Do you think there's opportunity in the market for buyers today?
JS: It's a bit of a double-edged sword. When there's opportunity in the market, it often comes with a lack of confidence, and buyers will often follow confidence. Which means a lot of buyers can miss an incredible buying opportunity. We've seen rate volatility this year, and a lot of buyers think that must mean it's a terrible market to be buying in. But what rate volatility means is you might get more price sensitivity from sellers who want to move, so they drop their prices. They want to get on with their lives. So that rate increase can be discounted by the fact that a property that may have been at 550 earlier in the year might now be marketed at 500,000, and the opportunity sits right there, as opposed to their monthly mortgage payments themselves.
RM: You may actually find people are able to make a bigger step, if they're buying a first home or making a move, than they were in the not-too-distant past.
JS: Totally. We talk about the trading gap all the time. The trading gap is: don't always focus on what your absolute sales price is. I know we always want to be breaking records for you, our client the seller, when we're selling your property. But the value in the move can quite often be what you can discount on your onward move. So we'd always encourage sellers who are on the market, aren't seeing interest, and are nervous about reducing the price, don't worry too much about that yet. Let's see if we can get some offers on the table, and then use those offers. You never know what price you may be able to get on your onward move. If we get it at a reduced price on your property, and then you negotiate that on your onward, and the move happens, your goal is achieved.
JS: Every time the Bank meets, the headlines go a bit mad. A hold, cut, or hike all make for good telly, but it's only a small part of the picture when you're deciding where to live. The clients we've worked with for years don't ring us in a panic the morning of an announcement. They ring us when something changes for them: a new job, a baby on the way, kids leaving home. That's when the market matters.
RM: And it's the same in the mortgage market. Rates will keep moving both ways, and trying to time the bottom rarely works out the way people hope. What works for borrowers is starting the conversation with an advisor early, sharing goals, and being flexible. Your life keeps moving too, and it's your advisor's job to ensure the finances fit it.
JS: So give your Foxtons agent a ring, have a chat with your Alexander Hall advisor. We've been doing this a long time, and the people we look after are getting on with their next chapter. We'd love to help you do the same.
