5 November 2026 · The numbers
The Bank of England just took £5,400 off what you can pay for a house
The base rate went to 4% today. Here is what a quarter point does to the maximum price that still leaves a North East landlord £250 a month.
The Bank of England raised the base rate to 4% today. It is the first rise since 2023, and the vote was 9–0 — nobody on the committee argued for holding it.
If you are buying a house to let, that is not a headline. It is an instruction to redo your sums, because the number that decides whether a property works has just moved.
What a quarter point actually costs
A landlord borrowing 75% of the purchase price pays interest on that loan. When the rate goes from 6% to 6.5%, the monthly interest on a £70,000 house goes from £263 to £285 — £22 a month, £264 a year.
That sounds small. It is not, because the £250-a-month figure my buyers need is a fixed target. If costs rise, the price has to fall to keep the target. Every £1 of monthly cost takes about £2,500 off what the house can cost.
The ceilings, before and after
These are the prices at which a three-bedroom house still leaves £250 a month after 12% management, £233 running costs and the mortgage. Same rents, same costs, only the interest rate changed.
- Sunderland — £70,667 at 6%, £65,231 at 6.5% (£5,436 less)
- Billingham — £67,851 at 6%, £62,631 at 6.5% (£5,219 less)
- Darlington — £58,933 at 6%, £54,400 at 6.5% (£4,533 less)
- Thornaby — £57,760 at 6%, £53,317 at 6.5% (£4,443 less)
- Seaham — £53,067 at 6%, £48,985 at 6.5% (£4,082 less)
- Stockton-on-Tees — £50,016 at 6%, £46,169 at 6.5% (£3,847 less)
- Middlesbrough — £41,333 at 6%, £38,154 at 6.5% (£3,179 less)
- Hartlepool — £34,293 at 6%, £31,655 at 6.5% (£2,638 less)
- Peterlee — £32,651 at 6%, £30,139 at 6.5% (£2,512 less)
A quarter-point rise takes more than five thousand pounds off the maximum price in the two best towns in the North East.
What that does to one real house
There is a three-bedroom terrace in Sunderland on the market at £63,500. Three-bedrooms there are agreeing at £850, and twelve houses have sold on the same street, most recently at £85,000.
At 6% interest it leaves £277 a month. At 6.5% it leaves £257. Still a pass — but the room for error has gone.
Now put the price up. At £67,000 the same house leaves £243 a month at 6.5%, which fails. At 6% it passed at £67,000 with £264. So the rise took about £3,500 off the top offer on a house that, on paper, still works.
And there is already an offer of £61,000 on that property. Six weeks ago that looked like a number to beat. Today it looks like the price.
What I would do this week
Do not sign anything on a rate you have not checked in writing. A broker's illustration from last month is now out of date, and lenders reprice within days of a move like this.
Re-run the ceiling for the town you are buying in before you offer, not after. If the number falls below the asking price, the deal is gone and it is better to know before the survey fee.
And remember what the rate does not change. The rent. A house that lets for £850 lets for £850 whatever the base rate is. Which means the answer to a rising rate is not a better yield — it is a cheaper house, or a different town.
That is the whole of it: the rent is fixed by the market, the costs are fixed by the lender, and the only number you actually control is the price you agree to pay.
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Figures are modelled on let-agreed rents recorded in the North East, 12% management, £233 monthly running costs, £40 insurance, and interest-only mortgages at 75% loan to value. The 6.5% is a modelled sensitivity, not a quoted lender rate.
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I run these numbers every morning across the whole North East. If you want the current figures for your town, tell me the town: mikebells.co.uk/contact
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