Bank of England raises rates to 4%: what it means for landlords and tenants

On 5 November 2026 the Bank of England raised Bank Rate from 3.75% to 4%. It is the kind of headline that sends landlords straight to their mortgage statements. Here is what it actually changes, who feels it first, and what it does and does not mean for rents.

What happened

The Monetary Policy Committee voted 8 to 1 to raise Bank Rate by 0.25 percentage points, to 4%. The one member who disagreed wanted to go further, to 4.25%.

The reason is energy. Global energy prices have kept rising, UK inflation reached 3.5% in September, and the Bank now expects it to reach around 5% by the middle of next year. The Bank was clear that policy is "not on a pre-set path". The next decision is on 17 December 2026.

Landlords on a tracker or variable mortgage

This is where the rise lands first. Tracker mortgages follow Bank Rate, so your rate usually goes up by the same 0.25% from your next payment. Your lender will write to you with the exact figure.

As a rough guide, on an interest-only mortgage the extra cost is simple to work out:

• £100,000 borrowed: about £21 a month more
• £150,000 borrowed: about £31 a month more
• £200,000 borrowed: about £42 a month more

That is 0.25% of the loan, divided by 12. On a repayment mortgage the change is a little different, so use your lender's figure, not ours.

Landlords on a fixed rate

If your rate is fixed, nothing changes until the fix ends. The date that matters is your end date, because that is when you move onto whatever rates are available then. If you do not know it, it is worth finding out now rather than in the month it expires.

Can you put the rent up to cover it?

Not straight away, and not whenever costs change. Since 1 May 2026 rent increases for private tenancies in England go through a Section 13 notice:

• It uses the prescribed form, Form 4A.
• You must give at least two months' notice.
• The new rent can start no sooner than 52 weeks after the tenancy began, or after the last increase.
• Your tenant can challenge the increase at the First-tier Tribunal before it takes effect.

In practice that means a rate rise is something to plan your next annual review around, at a fair market rent, not something to pass on overnight. An increase that is well above what similar homes let for is the one most likely to end up at tribunal. Our guide to Section 13 rent increases walks through the process step by step.

What it means for tenants

If you rent, a rise in Bank Rate does not change your rent on its own. Your landlord can only raise it once a year, in writing on the proper form, with at least two months' warning, and you can ask the tribunal to look at it if you think it is above the market rate.

What we would do this week

• Check whether each mortgage is a tracker, variable or fixed, and note any fix end dates.
• Look at when each tenancy last had a rent review, so the next one is planned, not rushed.
• Make sure your costs are working for you, including what you pay to have the property managed.

Rates are up. Our fees are down.

For new landlords who instruct us before 31 December 2026, The Residential Grid is offering full management at 6%, half our usual 12%. That includes handling rent reviews properly, with the right notice on the right form. See the offer.

Book a free valuation: call 01582 310018, email info@theresidentialgrid.co.uk or visit theresidentialgrid.co.uk.

This article is general information, not financial advice. Mortgage figures are illustrative; your lender's figures apply. Source: Bank of England, Monetary Policy Summary, November 2026.