According to a new study, over two-thirds of UK mortgage brokers expect interest rates to stop falling and resume their upward trend by the beginning of next year.

Butterfield Mortgages surveyed 300 brokers and 69 per cent said they believed the Bank of England base rate would be higher than the current level of 4.5 per cent by the start of 2026.

Over 28 per cent of brokers said they believed the base rate would sit at 5.25 per cent by the beginning of next year.

The survey marks a stark contrast to current speculation of further cuts from the Bank of England, which has slashed interest rates three times in the past six months. 

Various lenders had already predicted further cuts, with Santander targeting rates of 3.75 per cent by the end of the year.

Analysts at Barclays and Morgan Stanley were more boisterous, predicting rates as low as 3.5 per cent.

However, Goldman Sachs took a step further, saying interest rates would hit 3.25 per cent by June 2026.

Butterfield Mortgages chief executive Alpa Bhakta said the results were “surprising” given the current sentiment around rates.

“This underscores the need for lenders to stay ahead of the curve – our research points to a clear demand for expert guidance in navigating the increasingly complex regulatory and tax landscape. 

“Specialist lenders must utilise their network of regulatory and tax experts to help brokers support property investors to make confident decisions about their portfolios in the coming months.”

Stamp Duty changes will ‘complicate’ market

A majority of brokers, at 67 per cent, said they expected interest rates and the cost of borrowing to be the most crucial factor in the property market’s performance for the upcoming year. 

The report said brokers were “also considering how government policy related to property regulations and tax will impact the market.”