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Interest Rates, Market Uncertainty & the Informed Buyer: Locus Keys' Guide to 2025 By Locus Keys – Your Local Estate Experts | June 2025
- Nadeem Mohammad Abdul
- Jun 24
- 4 min read
“In an uncertain market, the advantage belongs to those who understand the full picture.”
The UK property market is experiencing its most complex phase in over a decade. With interest rates holding steady at 5.25%, buyers are understandably cautious — yet many are also eager to act before prices and competition rise again.
At Locus Keys, we believe that educated decisions create confident buyers. So we’re cutting through the noise to offer a comprehensive perspective on:
The current state of interest rates.
What leading indicators suggest about 2025 and beyond.
How this climate affects affordability and buyer psychology.
The real question: Is now a good time to buy?
Our practical advice based on real-time market activity.
Where Are We Now? Interest Rates at a Standstill
As of June 2025, the Bank of England’s base rate sits at 5.25%, a level it has maintained since Q3 2023. The rate rises of 2022–23, aimed at curbing inflation, have now plateaued — but the market remains in an adjustment phase.
Key Economic Context:
Inflation has fallen to around 2.8%, closer to the BoE’s 2% target, but still sticky.
Wage growth remains strong, contributing to sustained consumer spending.
Mortgage rates have stabilised but remain elevated — 2- and 5-year fixed deals typically range between 4.5% to 5.6% depending on loan-to-value ratios.
Lenders are cautious, and affordability checks remain stringent.
This means most buyers are now navigating a landscape where mortgage approvals are harder to obtain, and monthly repayments are significantly higher than they were pre-2022.
Will Interest Rates Come Down in 2025?
Short answer: gradually — and slowly.
According to both Bloomberg Economics and the National Institute of Economic and Social Research, the BoE is expected to begin modest rate reductions by late Q3 or Q4 of 2025, assuming inflation continues to cool and wage growth stabilises.
However, BoE policymakers are in no rush. Having been criticised for being slow to react to inflation in 2022, the current policy strategy is about maintaining stability, not rapid correction.
Locus Keys’ View: Expect cautious reductions of 25–50 basis points at a time, with base rates hovering between 4.5%–5% well into 2026. The age of 1.5% mortgages is behind us.
The Buyer’s Dilemma in 2025
For today’s buyer, the property market feels like a paradox:
Prices in London and the South East have cooled marginally from their 2022 peaks (by approx. 3–5%), but not crashed as some predicted.
Rents are rising, with annual rental inflation in key boroughs between 6–9%, pushing many tenants to consider ownership sooner.
Affordability is tighter due to higher mortgage rates and cost-of-living pressures, especially for first-time buyers and single-income households.
The market isn’t hot, but it’s far from frozen.
Who's Buying Right Now?
At Locus Keys, our client base this year includes:
"Life-stage movers": those upsizing or downsizing due to marriage, children, or retirement.
Strategic first-time buyers using family support or Help to Buy equivalents.
Investors snapping up properties in undervalued postcodes, especially where rental yields have increased.
The speculative "wait and see" buyer is still sitting on the sidelines — but may soon miss their window.
Should You Buy Now or Wait?
This is the question we hear daily — and while there's no blanket answer, there is a framework.
Buyer Profile | Locus Keys Recommendation |
Stable income, healthy deposit | Proceed now, especially if property meets long-term needs |
Relying on high-LTV mortgage | Wait or explore shared ownership, build credit and deposit |
Investor | Act now, focus on strong rental areas |
Selling & rebuying | Move cautiously, understand both sides of the deal |
First-time buyer | Seek professional advice, compare rent vs. ownership costs carefully |
What Most Buyers Don’t Consider
Beyond just rates and repayments, there are several under-discussed factors affecting buyer decisions in 2025:
1. Psychological Market Lag
The emotional response to interest rate hikes lags behind the data. Even though conditions are stabilising, many buyers are still in a “2023 fear mindset” — hesitant, anxious, and overly cautious. This creates opportunity for those who can move with clarity.
2. Limited Stock = Competition
While demand has cooled slightly, supply remains historically low. Quality listings are still receiving multiple offers — especially in high-demand commuter zones and regenerated boroughs.
3. Remortgaging Will Offer Relief
Buyers today can lock in shorter-term deals (2–3 years) with the expectation of remortgaging at lower rates in 2026–2027. This offers flexibility without waiting indefinitely.
How Locus Keys Supports Buyers in This Climate
We understand that today’s buyer isn’t just looking for a home — they’re looking for confidence.
That’s why our team offers:
Access to top-rated independent mortgage brokers who can help you unlock better deals, even in a tough lending market
Tailored property shortlists based on your budget, future plans, and neighbourhood priorities
Guidance through Help to Buy alternatives, shared ownership, and government schemes
Market forecasting, not just transaction handling — helping you understand timing and price trends
Post-purchase support, including lettings management for investor buyers
Final Word: Don’t Wait for Certainty — Move with Strategy
Waiting for rates to drop significantly might cost more than it saves. If house prices stabilise or climb again while rates fall only marginally, the cost of waiting could be higher than the benefit.
The right time to buy isn’t about chasing the lowest rate — it’s about securing the right home, on the right terms, with the right support.
At Locus Keys, we’re here to guide you through that process — with transparency, strategy, and a true understanding of the market beyond the headlines.
Ready to explore your options? Visit www.locuskeys.co.uk or email us at info@locuskeys.co.uk to book your personalised consultation.
Let’s make your next move a smart one!