A new survey of 300 UK mortgage brokers has found growing pessimism around the economy. 

Some 69% believe the base rate will be higher than the current level of 4.50% at the start of 2026.

And 67% expect interest rates and the cost of borrowing to be the single most important factor in determining the performance of the property market in 2025.

Meanwhile 64% said recent regulatory and tax changes have made the property investment landscape more complicated.

UK mortgage brokers are anticipating the base rate to rise again by January 2026 and regulatory complexity in the property market over the coming year to increase.

New survey data commissioned by Butterfield Mortgages in the UK has revealed that over two thirds of the 300 (69%) mortgage brokers surveyed believe that the Bank of England base rate will be higher than the current level at the start of 2026, with the most commonly selected answer (28%) being a significant rise to 5.25%.

The survey also revealed that the majority (67%) of brokers expect interest rates and the cost of borrowing to be the most vital factor in the property market’s performance in the coming year.

UK brokers are also considering how government policy related to property regulations and tax will impact the market. In fact, 64% said that the changes forecast to be made in April, such as the increase in Stamp Duty, have made the property investment landscape more complicated to navigate.

Alpa Bhakta, Butterfield chief executive, says: “It’s no surprise that most UK brokers remain focused on the Bank of England’s interest rate decisions—these have long been, and will continue to be, the key driver of market activity. 

“However, it is surprising that 69% of brokers expect the base rate to be higher at the start of 2026, especially given January’s decline in inflation and the Bank of England’s indication that further rate cuts could follow.

“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.

“While market conditions have shown some signs of improvement, it’s clear that brokers and lenders must collaborate closely.”