The Bank of England has reported that over half of UK homeowners will experience higher mortgage repayments during the next three years. About one third of the homeowners have so far been shielded from the higher interest rates that began after the pandemic due to their current fixed rate mortgages. It was in December 2021 that the historically low standard base interest rate of 0.1% began to rise and by August 2023 had risen to 5.25%. Between 2021 when the base rate reached a peak of 5.25%, homeowners who chose a fixed rate mortgage or remortgage might have chosen a rate much lower than the current offers from lenders.

Due to cheaper borrowing rates from lenders, home buyers responded to the opportunity and the UK housing market experienced the fastest annual growth in two years for November. According to Nationwide, the average house price grew by 3.7% compared to November 2023. This level of growth in the housing market was surprising to experts. Despite lower interest rates, house prices remain elevated, and consumers have yet to fully feel the relief from lower inflation to have found saving for a deposit affordable. As a result of the boost in the market, the increase in house prices is likely to increase property values of homeowners at a time when getting the best remortgaging rate possible is important.

In the current economic climate, the prospect of remortgaging has never seemed more appealing for UK homeowners. With the Bank of England's Monetary Policy Committee (MPC) recently slashing the standard base rate to 4.75% during their November meeting, the landscape of lending has shifted significantly. Despite the dampening of expectations for a third rate cut in 2024, due to the inflation uptick to 2.3% from a year-low of 1.7%, there are still compelling reasons to explore remortgaging rather than settling for your lender's Standard Variable Rate (SVR).

With the recent decline of lender interest rates and some below the standard base rate of 4.75%, as decided in the November meeting of the Bank of England's Monetary Policy Committee (MPC), UK homeowners may find this an opportune moment to consider remortgaging. Many homeowners might be considering a wait and see attitude since there are whispers of a possible rate cut in early 2025. However, waiting could cost the very savings one is searching for with a new deal. Here's why making the move now could save significant money and what a borrower needs to know before making a decision.

What is in store for the UK housing market is a concern for some experts, as there are factors at play that could stall growth and in doing so could stall the economy. The housing market and its constant ebb and flow through the ups and downs are an important part of our economy no matter whether one is a homeowner or not. There are those that next year will be considering a purchase of a new home for the first time, those considering a larger home for their growing family or the combining of generations into one property, while there will be others downsizing as their family matures into their own family units. No matter where the home buyer is in the market, the flow of buying and selling is important to keep it going, and it is when there are fewer buyers that there are stalls to the needed growth. Unfortunately, there are many buyers that could be shut out of the market next year.

There is a strong expectation that there will be fewer homeowners choosing to move home either by upgrading as their family has grown or downsizing as it matures, and children move on to grow their own family homes. By choosing to stay put, homeowners could slow down the natural flow of the housing market. Without starter homes as homeowners upgrade, fewer will be available for first-time buyers. This will increase demand for newly built first-time buyer type homes which would push prices higher. This is also a burdened trend for first-time buyers as they have been turning to homes in need of repairs, upgrades, and improvements to find one they can afford.