UK mortgage market update July 31 2026: rates held, stamp duty and rent controls ruled out
The Bank of England held its base rate at 3.75% on Thursday 30 July, but the vote was closer than expected, a hawkish hold that still points to higher borrowing costs for longer. In the same week, new Prime Minister Andy Burnham ruled out changes to stamp duty in the Autumn Budget, and Housing Secretary Angela Rayner confirmed rent controls won’t be introduced in England. Mortgage lending jumped sharply in June, and the cheapest fixed rates broadly held steady this week after a month of rises.
Here’s what actually happened, and what it means depending on your situation.
This week at a glance
| The Bank of England held the base rate at 3.75% on 30 July, but the vote was 6 to 3, with three members backing an immediate rise to 4%, up from two dissenters in June | |
| Stamp duty will not change in the Autumn Budget, Prime Minister Andy Burnham confirmed on 28 July, ending weeks of speculation about a property tax overhaul | |
| Rent controls ruled out for England by Housing Secretary Angela Rayner, the same day | |
| Mortgage borrowing more than doubled month on month, with net mortgage lending hitting £7.7bn in June, up from £3.3bn in May (Bank of England, 29 July) | |
| The FCA's mortgage rule review consultation closed on 28 July, with proposals aimed at first-time buyers, the self-employed and older borrowers now moving to a policy statement expected later this year | |
| The cheapest fixed rates held broadly steady this week after four weeks of rises, though the wider market average remains elevated (Moneyfacts) |
The Bank of England’s hawkish hold
Thursday’s decision was the headline event of the week, and on the surface it looks uneventful. The base rate stays at 3.75%, unchanged since December. Look at the vote split, though, and the story is more interesting.
The Monetary Policy Committee voted 6 to 3 to hold. Huw Pill, Megan Greene and Catherine Mann all backed an immediate rise to 4%. In June, only two members voted that way. That’s a harder line from the committee, driven by concern that higher energy prices could feed into wages and prices more broadly, even though headline inflation actually fell to 2.6% in June, its lowest reading since March 2025.
Governor Andrew Bailey didn’t signal that a rise is imminent, but the direction of travel in the committee’s thinking matters more to your mortgage than the decision itself. Fixed rates are priced off swap rates, the market’s view of where interest rates are heading over the next two to five years, not off the base rate directly. A more hawkish committee tends to keep those swap rates, and therefore fixed mortgage pricing, higher than they would otherwise be.
The next base rate decision is 17 September 2026.
What the new Prime Minister ruled out this week
No stamp duty changes in the Autumn Budget
Burnham had previously argued for reforming property taxation, which fuelled speculation he might scrap or overhaul stamp duty and council tax. He's now ruled that out at this moment in time, though he says he still wants to make taxation fairer over the longer term.
No rent controls for England
Housing Secretary Angela Rayner confirmed the government will not introduce rent controls, closing off a second area that had unsettled the buy-to-let and lettings sector.
Angela Rayner returns to housing
As Secretary of State, with a programme centred on council housebuilding, described as the largest since the Second World War, and tighter standards for private landlords.
Industry reaction was pointed. Some estate agents welcomed the clarity, others argued the damage from weeks of speculation had already been done, discouraging buyers and sellers from committing while the rules seemed to be in flux. The practical takeaway is straightforward: the tax rules you know today are the tax rules for this Budget. Any wider reform to council tax or a proportional property levy remains a longer-term possibility, not something to plan a 2026 purchase around.
Mortgage lending jumped in June
Away from the politics, the Bank of England’s Money and Credit report, published 29 July, showed real momentum building before this month’s volatility.
Mortgage lending, June vs May 2026
| Measure | June 2026 | May 2026 | Trend |
|---|---|---|---|
| Net mortgage borrowing | £7.7bn | £3.3bn | |
| Mortgage approvals for house purchase | 58,200 | 56,600 | |
| Remortgage approvals | 34,200 | 33,800 | |
| Effective rate on newly drawn mortgages | 4.35% | 4.22% |
Net borrowing came in well above the recent six-month average of £4.9bn, though approvals, a better guide to what’s coming next, remained slightly below their own six-month average. Analysts pointed to a temporary lull in Middle East tensions during June, alongside easing inflation, as supportive factors. The effective rate on new mortgages rising to 4.35% is a reminder that even average figures lag what’s happening in real time. June’s data reflects deals agreed before this month’s rate rises took hold.
Average UK mortgage rates this week
Average mortgage rates this week
| Product | 22 Jul 2026 | Trend | |
|---|---|---|---|
| Two-year fixed | 5.57% | Broadly stable | |
| Five-year fixed | 5.60% | Broadly stable | |
| Standard Variable Rate | 7.13% | No change | |
| Bank of England base rate | 3.75% | Held 30 July |
The lowest rates available this week
Lowest rates available this week
| Borrower type | Lender | Rate | Fee | Max LTV |
|---|---|---|---|---|
| Home mover, 2-year fix | first direct | 4.32% | £490 | 60% |
| Home mover, 5-year fix | first direct | 4.38% | £490 | 60% |
| Remortgage, 2-year fix | first direct | 4.47% | £490 | 60% |
| Remortgage, 5-year fix | first direct | 4.54% | £490 | 60% |
| First-time buyer, 2-year fix | West Brom BS | 4.78% | £1,499 | 90% |
| First-time buyer, 95% LTV, 2-year | West Brom BS | 5.15% | £499 | 95% |
| First-time buyer, 95% LTV, 5-year | Barclays / first direct | 5.25% | £0 | 95% |
Source: Moneyfacts, 29 July 2026. The lowest headline rate is not always the same as the best overall value once fees are factored in.
The reassuring detail this week is stability. After four straight weeks of rises, the lowest available rates for remortgage and home mover borrowers held firm, a sign that some of the panic pricing seen earlier in July may be settling, even if the wider market average remains elevated.
The regulatory picture: FCA consultation closes
Away from the politics, the Bank of England’s Money and Credit report, published 29 July, showed real momentum building before this month’s volatility.
The FCA’s consultation on its mortgage rule review, Consultation Paper CP26/18, closed to responses on Tuesday 28 July. The proposals, if adopted, would give lenders more flexibility to lend to:
Who CP26/18 aims to help
- First-time buyers currently excluded by standard affordability rules
- Borrowers with variable or irregular incomes, including some self-employed applicants
- Older borrowers seeking later-life lending options
- People with historic, but not current, credit difficulties
- Interest-only borrowers, through clearer rules on credible repayment strategies
The FCA has said it will consider feedback and aim to publish a final Policy Statement in the second half of 2026. Nothing changes immediately, but it’s worth flagging to anyone who’s previously been declined on affordability grounds. The rules they were assessed against may shift within months.
House prices: growth slows into August
Nationwide’s House Price Index, published right at the end of this week (31 July), showed annual house price growth slowing to 1.8% in July, down from 2.2% in June. Prices rose just 0.1% month on month, taking the average property price to £277,542.
Commentators pointed to a familiar mix of causes: mortgage rates that settled briefly in early July before ticking up again, and a widening gap between the strongly performing North of England and a stagnant London and Home Counties market. August is typically a quiet month for the housing market, and most expect more of the same until September’s back-to-school activity picks up.
What to watch next week
What to watch next week
| Wednesday 19 August, July inflation figures from the ONS. The next real test of whether June's fall to 2.6% was a turning point or a blip | |
| Thursday 17 September, the next Bank of England base rate decision | |
| Ongoing, oil prices and Middle East developments. They've been the single biggest driver of swap rate movements, and therefore fixed mortgage pricing, all summer | |
| Ongoing, the FCA's policy statement on CP26/18, expected in the second half of 2026, will set out which affordability changes actually go ahead |
What this means for you
If your current deal ends within the next six months, this remains the week to act rather than wait. Rates have stopped climbing for now, but a hawkish Bank of England and a still-volatile energy market mean there’s no guarantee that calm continues. You can typically secure a rate up to six months ahead of completion and switch to something cheaper if it appears before you finish.
If political uncertainty has been holding you back from a purchase decision, this week’s announcements on stamp duty and rent controls remove two of the bigger unknowns, at least for the year ahead.
Frequently asked questions this week
Did the Bank of England raise interest rates in July 2026?
No. On 30 July 2026 the Bank of England held its base rate at 3.75% for a fifth consecutive meeting. However, the vote was 6 to 3, with three of nine committee members backing an immediate rise to 4%, up from two dissenters at the previous meeting in June.
Is stamp duty changing in 2026?
No. Prime Minister Andy Burnham confirmed on 28 July 2026 that stamp duty will not be reformed in this year's Autumn Budget, ending speculation that had built up around potential changes to property taxation.
Are rent controls coming to England?
No. Housing Secretary Angela Rayner confirmed on 28 July 2026 that rent controls will not be introduced in England.
What is the next Bank of England interest rate decision?
The next scheduled decision is Thursday 17 September 2026.
This article is for information only and does not constitute financial advice. Rates quoted are accurate as at the dates stated and are subject to change or withdrawal without notice. Sources: Bank of England, Office for National Statistics, Moneyfacts, Nationwide, Financial Conduct Authority, and UK mortgage trade press published 27 to 31 July 2026.
Reviewed by Brennan Goodwin, CeMAP-qualified mortgage adviser at Heron Financial. Last updated: 31 July 2026.