The Bank of England’s Monetary Policy Committee (MPC) has voted during their March meeting to increase the standard base interest rate. This is the eleventh consecutive time the MPC has voted for an increase. It is now at 4.25% and many experts believe it will not be the last time the rate will increase. It could reach 4.5% by this summer. This information should be considered by those that could be financially impacted by higher interest rates.

For homeowners, the best strategy according to the experts, is to shop for a remortgage no matter where one is in their mortgage term. For those already at the end of their term which have been moved to their lender’s standard variable rate (SVR), to keep from paying more than necessary a remortgage is certainly a good strategy to save money. Those that are close to coming to the end of their mortgage term could do well to consider shopping for a remortgage early. It allows time to prepare with important information in hand that will help any homeowner, no matter where they are in their mortgage term, to find the best remortgage offer.

The gloom and doom predictions for the housing market and perhaps even the UK economy could instead have a more optimistic outlook. The online property listing platform, Rightmove, has reported that there was a £3,000 increase in the housing market’s average house price. The new average house price is therefore at £365,357 in March. It is a minor but significant increase as it comes while much is unsteady about the economy and the housing market.

A new forecast for UK house prices has been reported and according to the Office for Budget Responsibility (OBR), house prices are set to decline by 10% against the average peak of last year. The reasoning behind this forecast is due to inflation and higher interest rates. House prices could then begin to rise again in 2026. However, this will come as little condolence to homeowners that will have further financial strains due to a decline in property values and continued higher interest rates.

Will they or won’t they is the question being asked concerning the next Bank of England’s Monetary Policy Committee (MPC) meeting on 23 March. The implications of another rate hike is that there could be a lot of negative impacts on consumers, especially homeowners and small business owners. Those with the largest value loans are going to be paying more if they are connected to a variable rate which means they are subject to further rate hikes after already being hit hard by the last ten MPC meetings. 

A recent report forecasted that an estimated 356,000 mortgage holders could find it difficult to pay their repayments, if at all, by summer of 2024. This could come as a surprise to some. It does, after all, forecast difficulties for homeowners into next year. They wouldn’t be wrong in being taken aback due to the many reports showing that inflation might have reached its peak and that corrections to the economy could be at work and all will be well soon.