Mortgage holders and borrowers will be breathing a sigh of relief this morning following the Bank of England’s decision to press pause on interest rates again yesterday. This follows the news that the UK government is on course to meet its target to halve inflation by the end of this year.

However, the financial squeeze looks set to continue for millions as central bank governor Andrew Bailey made quite clear in his accompanying remarks, declaring that “it’s much too early to be thinking about rate cuts”.

In a widely anticipated move, the Bank’s nine-strong monetary policy committee (MPC) voted to hold the base rate at 5.25% at their latest meeting yesterday. The committee vote was split, however, at 6-3, with three external MPC members preferring to raise the rate to 5.5%, suggesting that borrowing rates will be higher for longer.

The news will be of particular interest to estate agents, who will need to adjust their strategy as the era of near-zero interest rates fades ever further into the rear-view mirror, according to Dominic Grace, who led Savills’ London residential development team for more than 30 years – and is now senior advisor at data science firm Outra.

He said: “The ‘higher for longer’ approach of the Bank will scupper any notion that, for the foreseeable future, interest rates will return to the freakishly low levels enjoyed by home buyers over recent years. This is not just affecting values, but sales volumes too.

“Accordingly, agents will now need to work not just harder, but much smarter, to ascertain where they should operate and how they win instructions in a fiercely competitive market. Doing so will require access to high-quality data, as well as the ability to leverage the latest in predictive analytics, to anticipate where demand is likely to grow and accurately target the individual properties that are most likely to trade.”

Fred Jones, former head of Uber in the UK and now COO of instant buying firm UPSTIX, concurred with Grace when offering his thoughts.

He commented: “Homeowners may be tempted to breathe a sigh of relief as rate hikes remain paused, but the effects of fourteen previous rises have not yet fully fed through to the housing market.

“Falling prices and low demand are two issues that will continue to be a thorn in sellers’ sides as the Monetary Policy Committee cements its ‘higher for longer’ policy.

“In a low-demand environment, cash buying firms have a crucial role to play in stepping in where no buyers are available.”

Simon Gammon, managing partner at Knight Frank Finance, points out that the Bank of England’s decision to hold at 5.25% was largely priced in, and he expects the rate of inflation to be the biggest determinant of whether we see more substantial mortgage rate cuts before the end of the year.

He noted: “Typical five-year fixed rates now sit around 4.8%. That may ease to around 4.5% by the year end if the annual rate of inflation dips to 4% – 5%. Most borrowers are currently opting for tracker products, taking the view that, even if the Bank does opt to raise the base rate again, they would like to benefit from cuts to the base rate next year.”

According to Nick Leeming, chairman of Jackson-Stops, holding rates steady provides “certainty” for buyers who remain committed to their property search.

He explained: “The reality is that, while some buyers who wanted to move but didn’t need to will take a step back, house-hunters who need to move are still showing a commitment to go ahead with planned purchases. Persistent demand is why we saw UK house prices rise in October, underpinned by a dearth of supply on the commuter belt and UK coastline.

“This is the final time the Monetary Policy Committee will meet before the chancellor’s Autumn Statement, when we hope to hear more about the government’s plans for the housing market including possible policy changes and tax cuts.”

Jason Tebb, CEO of OnTheMarket, commented: “Holding rates steady at 5.25% will boost buyer and seller confidence, giving a welcome lift to the Autumn housing market, which traditionally tends to be busy.

“The Bank of England’s decision to hold rates for the second consecutive meeting will be welcomed by borrowers hoping this is further confirmation that base rate has peaked after many months of increases, which have negatively impacted affordability.

“Another pause should give buyers and sellers who had put plans on hold more confidence to transact.”