The Office for National Statistics confirmed on Wednesday that inflation remained at 2.8% in the 12 months to May, unchanged from April. Property experts say mortgage rates could continue to fall and buyers may begin to return, but warn people to remain realistic and not anticipate significant rate cuts.
Inflation Holds Steady at 2.8%
The Consumer Prices Index rose by 2.8% in the 12 months to May 2026, the same rate as in the 12 months to April. On a monthly basis, CPI rose by 0.2% in May, matching the increase in May 2025. Grant Fitzner, Chief Economist at the ONS, said: "After last month's slowdown, inflation held steady in May as various price movements offset each other. The main upward movement came from transport, with airfares, vehicle taxes and petrol prices all pushing up inflation. These were offset by lower food prices, with decreases in inflation seen across a range of meat, dairy and vegetable items compared to last month, as well as the cost of domestic heating oil, which fell back after climbing in recent months."
Mortgage Rates Expected to Edge Down
Chris Barry, director of London-based Thomas Legal, said mortgage rates will react positively to the news and that prospective buyers will begin to re-emerge after activity levels ground to a halt when the Middle East conflict broke out. He stated: "Buyers have been disappearing since the war in Iran started, so steady inflation in the UK along with an end to the conflict should begin to even out supply and demand in the housing market. This should give the market a boost."
Rohit Kohli, director of Romsey-based The Mortgage Stop, found the figures surprising but believed they would prompt mortgage rates to continue edging downwards at a measured pace. He said: "This inflation data is a little surprising, but it is welcome news for borrowers either way, as the Bank of England is now less likely to be forced into a tougher position to combat inflation. Saying that, it is probably still too early for cuts. I would not expect sharp rate reductions from lenders on the back of the data, but the gradual downward tweaks we have seen recently may continue if nothing unexpected knocks confidence."
Buyer Confidence Improving
Katy Eatenton, mortgage and protection specialist at St Albans-based Eatenton Finance, agreed that inflation staying the same will not trigger an avalanche of sharp rate cuts, but should see mortgage pricing continue to move in the right direction. She noted: "This week we have definitely seen an increase in enquiries as buyers gain a little more confidence about the economy and general direction of mortgage rates now that the Middle East conflict appears to be over."
Darani Ganesharajah, mortgage broker at Springtide Capital, hailed the inflation figures as great news and highlighted that several lenders had already trimmed their rates over the past week. She added: "Several lenders have cut rates this week, with Santander announcing further reductions to come in effect from Thursday, including on tracker products. Even if a Bank of England rate cut isn't around the corner, lower tracker margins are helping deliver more competitive options for borrowers."
Realistic Expectations Advised
Manooch Suree, director of Uxbridge-based Zinga Financial Services, welcomed the data as good news but cautioned that the public should not anticipate aggressive rate reductions or an immediate return to pre-conflict levels. He said: "For mortgage borrowers, the direction of travel remains downward, but expectations should be realistic - we're talking about a slow easing in mortgage rates rather than a sharp drop."
Daniel Hobbs, CEO at Rayleigh-based New Leaf Distribution, believed activity levels would begin to gather momentum. He stated: "The traditionally busy spring property market was hit for six by the war, but now that it's over and mortgage rates are starting to come down we could see a busier than usual summer for bricks and mortar. A lot of people who put their buying and selling plans on hold may now revisit them and more competitive mortgage rates will likely add to the improvement in sentiment."
