Tembo Market Watch: April 2026

TLDR:

• Mortgage rates fall at the fastest pace for over a year in anticipation of the Bank of England holding the base rate this month.
• This might not signal a downward trend, as inflation is expected to rise later on this year, which could send mortgage rates upwards again. 
• The Bank of England voted to hold the base rate - the headline interest rate that influences what lenders charge on mortgages - at 3.75%. 
• Although mortgage rates started climbing off the back of the conflict in the Middle East, a host of mortgage lenders have been cutting rates on their mortgage deals in recent days. Now, the lowest rate available across Tembo's panel of over 100 lenders is now 4.55%.
• New home building slows, yet there are still 5% more homes for sale than a year ago. 
• Holding out for mortgage rate drops could cost you; see what rate you could get today from +100 lenders

Let’s break down exactly what’s happening and what this means for you.

Mortgage rates fall at the fastest pace for over a year

Mortgage rates have been dropping over the past two weeks, falling at the fastest pace for over a year. Now, the average two-year fixed rate mortgage dipped back down to 5.81% for the first time in weeks, while the lowest rate available across Tembo's panel of over 100 lenders is now 4.55%.

Although mortgage rates are still higher than they were before the conflict in the Middle East broke out at the end of February, these movements signal a meaningful and positive shift.

However, the volatility over the last two months is a reminder of how quickly the direction of the market can change, and that a downward trend is not guaranteed.

Rising inflation could threaten to send mortgage rates rising again

The latest data shows that inflation stands at 3.3% - a 0.3% rise from the month before -  after the conflict in the Middle East triggered the biggest jump in fuel prices for more than three years. 

The International Monetary Fund has warned that Britain faces the sharpest growth slowdown and the joint-highest inflation rate in the G7 this year, raising the prospect of a global recession.

Right now, the market is expecting inflation to remain stubbornly high for the rest of 2026, caused by the economic damage from the conflict, keeping it way above the Bank of England’s 2% target.

You might like: What happens to mortgage rates in a recession?

Bank of England holds base rate for the 3rd month

At midday on the 30th April 2026, the Bank of England’s Monetary Policy Committee (MPC) voted to hold the base rate - the headline interest rate that influences what lenders charge on mortgages - at 3.75%. 

At the start of April, the market was expecting a base rate hike, but peace talks have provided a fragile stability, resulting in the market switching expectations to a hold. 

This change in direction gave some of Britain’s biggest mortgage lenders the confidence to start cutting their mortgage rates again. It is normal for lenders to price in a base rate change (or lack of one) before it happens, which is why we’ve seen rates start dropping in the weeks and days leading up to the MPC meeting.

However, the Bank has previously warned that if the conflict is drawn out and the global energy market continues to be significantly disrupted, it could be forced to raise the base rate to keep inflation under control.

If this happens, the window for lower mortgage rates may be narrow, making it all the more important to see what rates you could get now rather than wait. 

What's really happening in the market right now

One of the significant trends amongst home buyers right now is many are being put off from buying by the uncertainty of whether now is a good time to buy. A recent report found that 52% of prospective buyers were ready to buy their first home this year, yet many were holding back.

Our team saw this first-hand at the London Home Show a few weeks ago. Talking to first-time buyers face to face, we heard how many were in a position to buy, but holding off while they were waiting for a ‘sign’ that now is the right time. 

If you are in this position, don’t stay on the sidelines. See what options are available to you to make an informed decision. Get started here

House building and buyer demand slow

Labour's planning reforms, confirmed in the Spring Statement last year, should have pushed housebuilding to a forty-year high. A larger supply of homes could have helped to stabilise house prices over time, helping buyers find more affordable homes. However, the government’s target to build 1.5 million homes during this parliament is now looking out of reach. 

England’s biggest housebuilder - Barratt Redrow - is scaling back its purchases of new land because of the uncertainty in the market caused by the conflict in the Middle East. While the London-focused Berkeley Group has stopped new land purchases altogether.

It will take time for this weaker buyer demand to translate into house prices. Right now, house price growth is low, rising just 1.3% over the last year, but we could see growth remain around 1% across the rest of 2026.

What does this all mean for you?

• First-time buyers: If you are trying to get on the ladder, the current environment is still challenging for many, but certainly not hopeless. In fact, our recent report showed conditions are actually quite favourable for first-time buyers right now. Get ahead of the game and explore your options now instead of waiting for a “sign”.
• Home sellers: With fewer buyers in market, pricing realistically is essential for a successful home sale. Keep in mind that your borrowing costs on a new property are likely to be higher than they were when you last bought. That said, a hold on the base rate does at least bring some predictability. Plan around what deals currently look like, rather than chasing a moving target. See your mortgage options without applying.
• Remortgagers: This is arguably where the stakes are highest right now. If your fixed-rate deal is ending soon, the most important thing you can do is act early. Rolling onto your lender's standard variable rate - currently averaging around 7.13% - could cost you significantly more each month than locking into a new fixed deal. Get started here

Savers have the pick of the crop

We’re into the first month of a new tax year, and after a period of fierce competition between providers, we’ve seen some interest rates drop. So it’s the perfect time to check what rate you’re on and if you can find a better deal elsewhere. Similar to mortgages, the outlook can still shift quickly, as providers are repricing products all the time. 

If you want stability, it might be worth moving your money into a fixed rate account like a 1 Year Fixed Rate ISA, giving you certainty of earning a competitive rate for a set time period. 

Remember, you can open multiple ISAs as long as you keep your deposits to your £20,000 ISA allowance for this tax year. So, you could move some of your money into a Fixed Rate ISA to benefit from the fixed interest rate, but place other funds in an easy-access Cash ISA for flexibility.

What should you do? Our top tips

Whether you’re thinking about buying, remortgaging or just planning ahead, here’s a clear checklist to help you make confident decisions in the current market:

• If you’re a home buyer: Understand your true budget early, and get a Mortgage in Principle so you’re ready to move when the right property appears. Get one here.
• If you’re a remortgager: If your current fixed-rate mortgage is ending within the next 6–12 months, now is the time to start exploring your options. Don’t automatically accept your lender’s standard rate; instead, see your options from across the market with Tembo.
• If you’re a saver: Periods of economic uncertainty can make budgeting feel more difficult, so make sure your money is working as hard for you as possible. Explore our range of savings accounts here.

The bottom line

The UK housing market is under real pressure from inflation and geopolitical uncertainty, but there are still meaningful opportunities for buyers, movers, and remortgagers.

Whether you are saving your first deposit, planning a move, or approaching the end of a fixed deal, the worst thing you can do right now is nothing. Understanding your options is one of the most powerful tools in your arsenal right now.

*Full terms and conditions of our rate checking service can be found here.