Experts have been concerned for homeowners and their ability to afford their mortgage repayments due to rising interest rates. Their warnings have grown for those coming to the end of their two-year fixed mortgage terms this year due to their need to move to interest rates of today from those offered when rates were historically low. The difference in their repayments could be hundreds of pounds more per month. The best strategy according to experts to make the most of any savings possible would be remortgaging.

The housing market might be in a transitional state according to a recent report. After seven consecutive months of declines in the average house price, April data revealed a slight increase of 0.5%. The data from Nationwide contrasted with the prediction of experts of continued decreases due to higher interest rates as well as remaining high asking prices in the market. The buying boost could be attributed to the rise in demand for flats from first-time buyers or due to the normal increase in buying that occurs in the spring season.

Homeowners are struggling to stretch their financial budgets according to several reports. Not only has inflation long taken a toll as prices have surged upward and remained, but energy costs have put some in the position to have experienced the past winter months choosing between food and heat. However, the reality is that many have yet to experience the next financial stress coming their way when their mortgage terms end.

On May 10, the Bank of England’s Monetary Policy Committee (MPC) will be meeting to discuss the state of the economy, inflation, and whether another increase is needed for the standard base interest rate. Depending on which way the wind blows on a particular day, the expectation is for further rate hikes due to inflation still residing in double digits or for rates to drop due to the strain on household budgets. All will be known in just a few weeks and the outcome either way will have an impact no matter what. For the truth of the matter is homeowners are facing higher rates than they did not long ago.

The UK housing market continues to show resilience as data reveals more surprises. Interest rates have been on the rise since December 2021. It was then the Bank of England’s Monetary Policy Committee (MPC) began the first of eleven consecutive meetings in which the standard base interest rate was increased. The rate went from almost zero at 0.1% to 0.25% at the end of 2021 to 4.25% last month. When rates are higher and borrowing more expensive, especially after an extended period of rates being low, the housing market would be expected to slow. However, there is still strong demand in the market as hopeful home buyers refuse to be deterred from their homeownership dreams.

The next meeting of the Bank of England’s Monetary Policy Committee (MPC) is looming and only weeks away. There was not a meeting in April, which gave some relief to those worried about further rate hikes of which there is a strong expectation it could be soon. The MPC has increased the standard base interest rate at each of the last eleven consecutive meetings. Starting in December 2021 when the rate increased from almost zero at 0.1% to 0.25% through to March 2023 when the rate increased to 4.25%. With inflation still in double digits, the MPC could hike the rate for the twelfth time on 11 May.