Held Base Rates & Increased Rents... What’s Next For Folkestone?

Lee Churchyard
Sep 22
3 min read

As autumn ramps up, Lee takes a look at where the housing market in Folkestone (and the wider Folkestone & Hythe area) appears to be in September 2025! The trendlines, pressures, and opportunities that buyers, sellers, landlords, and investors in our town should be aware of.

What’s the Current Data Telling Us?

The latest figures from the Office for National Statistics show that the average house price in Folkestone & Hythe in July 2025 was approximately £309,000, which reflects a 3.9% increase compared to July 2024.
First-time buyers in the area are paying around £252,000 on average.
Rents continue to rise: the average private rent in Folkestone & Hythe hit about £1,065 in August 2025, up 5.3% from a year earlier.
Affordability remains under pressure. Local incomes are being squeezed by rising living costs, while house price growth (though positive) and rent inflation both outpace income growth for many.

Base Rate Situation & Mortgage Climate

The Bank of England has held the base rate at 4% in its most recent decision.
Inflation remains stubborn, well above the 2% target, which has made the MPC cautious about cutting rates further right now.
As a result, mortgage rates are still relatively high, which has dampened some demand, especially among those entering or moving up the housing ladder. But the held rate also signals stability, which has its own subtle effects on buyer confidence.

How This Is Playing Out In Folkestone

Demand vs affordability tension: Even though prices are rising, many potential buyers feel priced out — wages aren’t rising as fast as house prices or rents. First-time buyers in particular are under pressure.
Rental market pressure: More people who can’t afford to buy are staying in, or entering, the rental sector. That’s pushing rents up, which puts stress on both tenants and local housing services.
Supply challenges: There are a number of empty or under-utilised homes in the area, which could be a resource if better managed.
Potential delays or caution in moves: Given uncertainty over future rate moves, possible tax or stamp duty changes (autumn budgets often bring surprises), some buyers and sellers may be holding off or pricing more conservatively.

What to Look Out For:

Next Bank of England decision (Nov): If the housing affordability pressure grows, there could be pressure to cut, but much depends on inflation, employment trends, and government fiscal policy.
Autumn budget & tax policy: Stamp duty, tax on second homes, support for homebuyers and landlords — any changes here could shift behaviour.
Mortgage product competition: As lenders feel the stretch from the base rate, there may be more competition to offer “good deals” to borrowers, especially for those with strong credit, larger deposits, or more flexibility.

Bottom Line

For Folkestone in September 2025, the housing market remains resilient but under pressure. Prices are rising modestly, rents are increasing faster, and the base rate being held at 4% provides some certainty — but not much relief.

If you’re looking to buy, you’ll need to be realistic about what you can afford and mindful of the timing of your move.

Sellers may be better off keeping expectations grounded, especially if the property isn’t in tip-top condition or in one of the most in-demand locations. Landlords still have opportunity, though rental inflation impacts both income and tenant demand.

Need any help or advice on housing, selling, buying or renting? Drop us an email at: folkestone@match-estates.co.uk or call 01303 475085 to see if we can help!

Sources: