HOM-B
October 31, 2025
Does it feel like everyone has been talking about the market bedding itself down for the winter? Do we get the impression that poor economic headwinds are responsible for lower consumer confidence, that property buyers and sellers will hold fast until after Budget Day on November 26, and that most people are expecting a raft of gloomy announcements in light of such poor economic forecasts, as inflation continues to run rampant? No chance then, surely, of any further base rate cuts this year?
HOM-B
Well, what if I were to tell you that the odds of a base rate cut this year have gone from 3/1 against, to an odds-on 1/2 in favour?
Because that is what has happened, according to a report in The Independent this week.
And if it comes off, it could spell some positivity for the housing market.
Let’s take a look at what is going on, why talk of a base rate cut is suddenly swirling, and how it affects Twickenham and Teddington homeowners.
We often talk about property prices when discussing the health of the property market, and whilst it isn’t the only gauge as to whether a property market is functioning, it is a useful marker to track.
As far as it goes, and in spite of challenges and plenty of gloomy headlines over the last few months, property prices in the UK have held up fairly well this year, including recent months.
New figures show they rose by 0.3% in October 2025, following a 0.5% increase in September, and overall a 2.4% annual rise, according to the latest Nationwide House Price Index.
It puts property prices in the UK at an average of £272,226.
This sort of steady picture feeds in to the considerations that the Monetary Policy Committee (MPC) will make when voting on whether to cut, hold or raise the Bank of England Base Rate this Thursday.
As for Twickenham, data from the Office for National Statistics (ONS), for the London Borough of Richmond upon Thames, at least, shows house prices averaging £804,000 across the borough (and around £726,000 here in Twickenham, according to Rightmove). That is an increase of 2% in 12 months, much in line with national figures, but more to the point is that it is a remarkably more optimistic picture locally than it was even one month ago.
The picture here is one of growing confidence and stability. For homeowners and landlords, this all feels like pretty good news.
Meanwhile, inflation held at 3.8% last month, marking the third consecutive month at that level, despite so many predictions that it would rise to 4%. Now, economists are predicting that it may start to drop, and that certainly through 2026 it is likely to return towards the Bank of England’s target 2% level.
The Bank of England typically uses the base rate as a tool to try to control inflation; when it runs away, the MPC will raise rates to attempt to slow it down.
That it looks to have hit a peak and is now set to drop is what is causing many analysts to conclude a base rate cut is looking more than likely now this year, perhaps as soon as when the MPC meets this week – although others caution that cutting too soon may reverse the drop and see inflation rise again.
Nevertheless, it’s another matter for the MPC to weigh up.
The Office for Budget Responsibility (OBR) has been a touch kinder in its latest review of national borrowing, giving Chancellor Rachel Reeves a little more headroom and raising hopes of a less restrictive Autumn Budget on November 26.
Perhaps this has fed into investors’ thinking over the couple of weeks which followed that review, as ten-year gilt yields have just fallen to 4.47%, having been at 4.65% only a month ago.
Gilt yields fall when gilt prices rise – and this can indicate a few things. One is that investors are seeking the perceived safety of government bonds. Another is that the cost to the government of borrowing drops – which is handy, as we head towards the Autumn Budget.
Most important of all, it can indicate that interest rates are falling – hence lending more fuel to the current fire of speculation that the Bank of England could cut the base rate as soon as this Thursday.
These figures might look a little dry, but they all perhaps point towards an encouraging theme: that we are seeing some calm after the storm.
In financial markets, speculation is mounting about a possible Bank of England base rate cut this Thursday. Analysts currently tip the odds slightly in favour of a 0.25% reduction, with traders re-pricing risk in anticipation of falling borrowing costs.
If it happens, it could have a meaningful effect on property market confidence.
Cheaper borrowing would improve affordability, encourage cautious buyers back into the market, and perhaps most importantly would give sellers and landlords the reassurance that we’re moving forwards again, after months of feeling something like stagnation.
For Twickenham, where higher market prices can mean affordability being stretched, even a modest rate cut could translate into a noticeable confidence boost.
The OBR’s improved outlook on national borrowing suggests the government has more fiscal wiggle room than previously feared. When it comes to what to expect on Budget Day, there is some reason to feel optimistic… or at least, to feel not quite so pessimistic! Economists do expect some £25 billion in tax increases to keep the books balanced, but the tone nevertheless feels gentler than earlier forecasts implied.
It perhaps opens the door to a markets-friendlier Budget on November 26, with a few policy shifts designed to support growth.
For homeowners, that could mean less risk of aggressive property-related tax changes. For landlords, too, it could mean a steadier outlook; with the Renters Rights Act now written into law, the government has a framework in which to make the private rented sector work, and they won’t want to see wholesale exiting of the market.
For the housing market as a whole, it could usher in the return of some cautious optimism as we head into this final stretch of the year – but perhaps more likely, set up 2026 as a year of property market recovery and gentle growth.
If the Bank of England does announce a rate cut, here at Bartlett and Partners we will expect to see an uplift in buyer confidence. Mortgage deals will become more attractive, new and returning buyers will come out into the sun, and that will lead to more viewings and a steadier pipeline of sales.
What it will also mean though is a rebalancing of demand against supply; for months, it has been tilted in buyers’ favour, with more property available than there have been buyers looking. This has had a stifling effect on prices – although, as figures show, they have nevertheless risen slightly over the course of 12 months.
Add in a softer-than-expected Budget, if indeed that is what we get (and the Chancellor, under pressure, may have her reasons to hope it is perceived to be as soft as possible), and we could be looking at a winter market that’s more resilient and less cautious than many would have predicted a few months ago.
The UK property market is complex, interconnected, and at times plain contradictory. One month’s optimism can be followed by a sudden and pervading lack of any positivity at all. But as it stands, when we scrape away the top layer and check out what is going on beneath the surface, there are definitely reasons for cautious confidence – and perhaps these various economic factors are combining at just the right moment.
At Bartlett and Partners we believe in being honest, transparent, and grounded. Sometimes that means delivering more underwhelming reports about the property market, flecked with notes of caution.
But right now, it means saying: the outlook may be better than many have feared. Still, it is clearly a game of fine margins.
If you’d like to discuss how these economic shifts might affect your home or investment, or if you would simply like to build a clearer picture of what’s happening locally, we’re always happy to chat. We try to keep the jargon to a minimum and promise no hard sell – it is just about straight answers from your local independent agent, right here in Twickenham.
In the meantime, keep up to date with what goes on and stay in touch with Twickenham and Teddington’s local property scene by staying tuned to our social media, and keeping an eye on the Insights page of our Bartlett and Partners website.
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