August 2026: rates on hold, a new Prime Minister and homebuying reforms

August is traditionally the summer slowdown in the property market, but there is plenty happening behind the scenes that is worth knowing about before the autumn picks up.

Bank of England: rates still on hold

The Bank of England held the base rate at 3.75% on 30 July, for the fifth consecutive time. Three of the nine committee members voted for a rise to 4%, reflecting growing concern that higher energy prices could lead to more persistent inflation.

The Bank's central projection shows inflation peaking at around 3.2% in late 2026. Renewed fighting in the Middle East has added fresh uncertainty to energy prices, and the Bank has said it stands ready to act as needed to keep inflation on track. The next decision is 17 September.

Mortgage rates: a volatile month

July was a story of two halves. Rates fell in early July following a brief ceasefire in the Middle East, with lenders including Santander cutting first time buyer rates. Then renewed fighting pushed rates back up mid month, and a number of lenders repriced upward again.

Rates are meaningfully higher than they were at the start of the year, and the window of cheaper deals that briefly opened in June has largely closed again.

The practical message is the same as it has been all year. Rates can move quickly in either direction. Securing a deal gives you certainty, and if something better comes along before you complete, I can usually switch you to it.

New Prime Minister: what Andy Burnham's agenda means for housing

Andy Burnham became Prime Minister on 20 July 2026, after winning the Labour leadership with the backing of more than 85% of parliamentary colleagues. With the former Greater Manchester Mayor now in Downing Street, he has said housing is his top priority. Here is what is confirmed, and what is still speculation.

Confirmed:

• He has pledged the largest council house building programme since the post war period, with a target of 100,000 new council homes per year, backed by a £40 billion programme.
• He has appointed John Healey as Chancellor and Angela Rayner as Housing Secretary.
• Electricity bills will not attract VAT for six months from 1 October 2026, as part of his cost of living package.
• In his first major interview as Prime Minister, he ruled out scrapping council tax and stamp duty or replacing them with a single property tax at this stage.
• Stamp duty will not be reformed in this year's Budget, though he has signalled he still wants to make property taxation fairer over time.

Being watched, not yet confirmed:

• There is speculation he may lower the mansion tax threshold from £2 million to £1.5 million, which would bring an estimated 150,000 more properties into scope.
• His wider instincts on property taxation, including possible land value tax reform and changes to capital gains tax on property, have been floated as longer term ambitions, but nothing has been announced and nothing has changed for buyers or landlords.

For buyers, more housing supply over time is broadly positive. For landlords, tighter regulation looks increasingly likely. Nothing changes immediately, but Burnham's record in Greater Manchester gives a reasonable indication of where national policy may head.

New homebuying reforms: what is actually changing

Before leaving office, Keir Starmer's government announced a package of homebuying reforms aimed at making the process faster and less likely to fall through. In progress:

• Upfront digital sales packs will become mandatory, so sellers will need to provide key property information before a sale is agreed rather than weeks into the process.
• Digital property logbooks will store a property's history and documents in one place, and earlier binding agreements are planned to reduce the number of sales that collapse after significant time and money has been spent.

What has not changed yet: these reforms are being rolled out over the next three years, with consultations due to begin in 2027. Nothing changes for buyers completing now, but over time the process should become faster and more secure.

House prices: the North West continues to outperform

House prices grew fastest in the North West over the year to May 2026, while prices in London fell. Savills have revised their national forecast down to around minus 2% for 2026, but that picture is driven heavily by London and the South East. Local fundamentals remain solid by comparison, with demand still present and motivated buyers progressing.

The market is in its usual summer slowdown, but the autumn tends to bring renewed activity. Getting your mortgage arranged now puts you in the strongest position when that picks up.