Base Rate Held: What It Means for Landlords and Tenants in 2025

The Bank of England has announced that it will hold the base rate, signalling a pause after a long period of rate volatility.

As the Bank puts it:

“We set Bank Rate to influence other interest rates… Although inflation is easing, we are not declaring victory. Any future cuts will be gradual and carefully judged.”
— Bank of England Monetary Policy Committee Statement

So while rates didn’t rise, they also didn’t fall — which means the current cost environment remains.

Quick Background — How Did We Get Here?

• In 2021, the base rate was just 0.1%.

• To tackle inflation, the Bank steadily raised rates.

• We are now in a phase of holding, not cutting — yet.

This matters because borrowing costs for Buy-to-Let landlords remain structurally higher than they were just a few years ago.

Impact on Landlords (Especially Buy-to-Let)

Even without a rate increase, BTL mortgage costs stay firm.

• Landlords on variable or tracker mortgages continue to feel pressure.

• Those refinancing this year still face tighter stress tests.

• Lenders remain cautious — requiring higher rental coverage ratios.

This doesn’t mean doom — but it does mean cash-flow clarity matters.

Comment from Duncan Rooney — CMO, Homesty

“A base rate hold can feel like good news — but for landlords it’s more like holding your breath rather than breathing out. Cost pressure is still real. The landlords who do well now are the ones who run the numbers properly and think long-term about keeping good tenants.”
— Duncan Rooney, CMO of Homesty

We’re seeing experienced landlords lean into tenant retention over turnover.
Keeping a great tenant is often cheaper than chasing a higher rent.

Impact on Tenants

For tenants, this means:

• No sudden drop in rents (yet).

• Competition for good homes remains strong.

• Renting continues to feel expensive — because landlords’ costs are still elevated.

However, the good news is no new upward shock from an unexpected rate hike.

Landlords! time to check your Yield >

Comment from Xavier Miró Argemí — CEO, Homesty

“Tenants shouldn’t expect immediate relief just because the base rate didn’t rise — but a hold is stability. And stability is the first step towards fairness. When landlords and tenants can plan, relationships work better.”
— Xavier Miró Argemí, CEO of Homesty

The current environment rewards clear communication and longer-term thinking from both sides.

Looking Ahead — Three Possible Paths

The story here: nothing changes quickly — and planning matters more than ever.

Homesty’s Take

The rental market works best when landlords and tenants trust each other.
In a high-cost environment:

• Landlords benefit from long-term, reliable tenants

• Tenants benefit from good landlords who communicate and maintain well

This is exactly why we built Homesty — to remove friction, fees and middlemen, so both sides can deal directly, transparently, and with respect.