The Bank of England has held the Base Rate at 3.75%.
There were no surprises there; it was the outcome widely expected over the last three weeks, particularly since the conflict in the Middle East began. In fact, I even wrote about this likely scenario in my article two weeks ago (see here).
But if you’re an HMO landlord – particularly one with mortgage borrowing in the background – we know that it can make the landscape look a little uneven.
Here is our breakdown of what has happened, and why in many ways, nothing changes; in fact, the market might be more positive than you may realise.
A Month That Changed the Mood
Cast your mind back only four weeks.
We were talking about rate cuts… not if, but how many.
Mortgage pricing was softening. Sub-4% deals were well back in the conversation. There was a sense that, finally, things were easing.
Then geopolitics stepped in.
Energy prices have climbed again, and that means inflation expectations have shifted, with lenders reacting quickly as swap rates rose. It means that mortgage products were already being repriced, even before the MPC vote on Thursday 19 March.
If you’ve been reviewing finance recently, you’ll have seen it:
- Products disappearing within days
- Rates edging back up
- Lenders becoming that bit more cautious again
So yes, the Base Rate has held. But the cost of borrowing had already moved.
Buy-to-Let Mortgages: What Landlords Need to Know Now
Despite what are undeniably going to look like economic headwinds, and despite increasing mortgage rates, it is still important to be clear: we are not back in 2022 territory.
Rates are still significantly lower than they were just 12–18 months ago, and that matters.
The expectation of a steady, predictable drop in borrowing costs this year has been disrupted — there is no denying that — but this does not mean the market is reversing.
For HMO landlords here in Ipswich, there are a few immediate implications:
1. Refinancing needs planning, not optimism
If you were hoping to refinance for something meaningfully less costly in the next few months, that window may not look quite as attractive as it did in January.
2. Stress testing is back in focus
Lenders are already tightening in response to swap rate movements. Rental coverage calculations matter more again, especially for HMOs where licensing and compliance costs are higher. Stress testing overall has been relaxed in recent years, but with the onus now placed on lenders to make those decisions, you should expect a bit more scrutiny if you are having those conversations.
3. Deals are more volatile
The shelf life of mortgage products is shortening. Waiting weeks to make a decision can now cost you the deal you were looking at. Moneyfacts has reported that the average shelf life of mortgage products is now around 14 days.
None of this is cause for panic. But it does mean decisions need to be more deliberate.
The Part Many Are Missing: Tenant Behaviour
The way tenants might react is where things get interesting for HMO landlords in particular, compared to other sectors.
While mortgage pricing has become a little less predictable again, tenant demand itself has not weakened.
If anything, the fundamentals – especially in shared housing – remain strong.
We’re still seeing:
- High demand for shared accommodation in town
- Affordability pressures pushing more tenants towards HMOs
- Limited supply in well-managed, compliant properties
But behaviour is shifting slightly, which is worth paying attention to – especially as signs are that tenants may become a little less eager to move.
Higher living costs and general uncertainty tend to reduce mobility. Moving house costs money. Deposits, overlap in rent, even transport – it all adds up.
For many tenants, staying put is the financially safer option, especially where rents are fair and the property is well-managed. Stability becomes more valuable when everything else feels uncertain.
For landlords, that’s not a bad thing:
- Lower voids
- Reduced turnover costs
- More predictable income
But there’s a balance.
Tenants are staying put, but they’re also more price-sensitive.
Push rents too aggressively, and you risk:
- Longer void periods
- Increased negotiation
- Tenants simply choosing a better-value alternative
In this market, value perception matters more than it did a year ago.
Rental Market Reality: Still Strong, But More Measured
We’re not seeing a collapse in rental demand. Far from it.
But we are seeing a shift from rapid rent growth to more stable, sustainable pricing.
For HMOs, that means:
- Rooms still let well when priced correctly
- Professional presentation matters
- Compliance and standards are non-negotiable
For good landlords, this is an advantage – because good stock performs. Average and low-quality properties will lag and build voids.
Our View at LEA Property Solutions
This isn’t a poor market. But it is not an easy one, and it warrants attention to how the market oscillates.
The Base Rate hold reflects wider uncertainty, but the HMO sector itself remains underpinned by strong demand and a structural need for shared housing.
The key differences now are that finance requires closer attention, rent pricing needs to be realistic, and tenant retention may become the order of the day.
What we’re not seeing are the warning signs of distress:
- No widespread forced selling
- No collapse in tenant demand
- No meaningful oversupply in the HMO space
What we are seeing is a market that rewards good operators.
What Should HMO Landlords in Ipswich Be Doing Now?
- Review your mortgage position early, not when you’re up against a deadline
- Focus on retention: a good tenant staying is worth more than chasing an extra £25 a month
- Price rooms sensibly, not optimistically
- Keep standards high: tenants have options
Stay commercially realistic and, most importantly of all, seek out a professional specialist HMO operator like LEA Property Solutions to manage your investment.
Looking Ahead
The expectation may have moved from rates likely to come down steadily over the course of 2026 to a more uncertain picture; some analysts now expect perhaps one base rate increase this year, while others still anticipate cuts as inflation data evolves.
Inflation, previously expected to hover a little above the 2% target, is now being talked about in the 3–4% range by some commentators, although official forecasts and market views can change quickly.
Nevertheless, even at 4%, that is low compared to where inflation got to following the breakout of war in Ukraine, when it peaked at around 11.1% in October 2022 and stayed elevated for many months.
The HMO market itself continues to function exactly as it always has:
People need somewhere to live, after all.
But affordability matters, and well-priced, well-run properties will outperform the rest of the market.
If you’re unsure how this shift impacts your portfolio, your refinancing options, or your rental strategy, this is exactly the time to have that conversation.