The Bank of England’s decision to hold the base interest rate at 4% will provide some predictability for the property sector, but investors are likely to remain cautious, according to property experts.

In a a widely expected decision, the bank’s monetary policy committee (MPC) voted by a majority of seven to two to leave the rate unchanged. The two members who did vote to reduce the rate wanted it to fall by 0.25 percentage points to 3.75%.

The MPC made three consecutive cuts earlier this year, but recent data shows inflationary pressures have started to creep back into the economy.

The decision to leave the rate unchanged “underlines how finely balanced the outlook is”, according to Andrew Lloyd, managing director at Search Acumen.

Lloyd added: “For the property sector, this consistency provides a degree of predictability that has often been missing in recent years, which should help investors and developers plan with more confidence.”

However, the cost of capital remains high enough to keep transaction volumes subdued and with further cuts unlikely this year, it may be 2026 before stronger growth momentum returns to the market, he said.

“Keeping rates the same could disappoint investors and slow recovery in valuations and yields. Investors will likely remain cautious, focusing on income-producing assets and prime properties, while weaker sectors like secondary offices or retail may continue to struggle,” Lloyd added.

The delay of the Autumn Budget until the end of November coupled with weeks of shifting tax proposals has unsettled both investor and consumer markets, according to Lloyd.

“Until the chancellor brings certainty and greater political clarity, many buyers are likely to adopt the ‘wait and watch’ approach in the face of such a high degree of speculation,” he said.

Rightmove mortgage expert Matt Smith said: “The later-than-usual Budget is very much on the horizon and the markets are having to wait until the end of November for answers to the questions that are driving a lot of the current uncertainty.”

Daniel Austin, chief executive and co-founder at ASK Partners, added: “Markets are still pricing in a cut before the end of the year, but with the Autumn Budget looming and an uncertain economic background, policymakers are unlikely to move until fiscal plans are clearer.”

Meanwhile, Nathan Emerson, chief executive of Propertymark, said: “Today’s freezing of interest rates will give perspective to current homeowners and provide reassurance to those looking to take a new mortgage product that costs will generally remain steady for the time being.”