Best Remortgage and Mortgage Rates Could Already Be Available Without MPC Vote
![Best Remortgage and Mortgage Rates Could Already Be Available Without MPC Vote Best Remortgage and Mortgage Rates Could Already Be Available Without MPC Vote](../../../../images/news/main/news_1721386934.jpg)
The outlook for the 2024 UK housing market is optimistic. Recent data says so, but even without it, experts are encouraged for the changes set to occur in the last half of the year. Inflation reached the target of 2.0% in May, and reported this week it remained so in June. Lenders encouraged by a sooner rather than later cut to the standard base interest rate by the Bank of England’s Monetary Policy Committee (MPC) have already begun to cut their own interest rate offers. Home buyers are showing up online to shop for properties, hopeful home movers encouraged by the demand from buyers and their own ability to purchase are listing their properties, and first-time home buyers are hopeful new schemes and lower interest rates will allow them to climb onto the property ladder.
As far as the data, Rightmove reported agreed house sales in the past month had climbed 15% over this time last year. Rightmove is a property listing website and reported the average house price of properties coming newly to the market dropped by 0.4% to an average of £373,493 signaling sellers are seeking to be competitive and sell their property quickly. This will be welcomed by home buyers.
However, there are many home buyers and home movers awaiting a rate cut by the MPC, which could be viewed as unnecessary since lenders have already lowered their rates and some by more than the expected cut by the MPC. Experts are forecasting a 0.25% reduction to be the first cut voted for by the committee, which would take the current base rate from 5.25% to 5.0%. Lenders have reduced their rates by more than 0.25%, which could be viewed as an opportunity to borrow now in the midst of the competitive lending market that has emerged.
There is even more reason to take advantage of the situation due to the recent report on inflation. Earlier this week, the report on inflation revealed it had remained for the second month in a row at a target of 2.0%, and the service sector inflation rate was expected to decline to 5.1% remained at 5.7%. This information has exhausted the hope for a rate cut during the next MPC meeting which is scheduled for 1 August. The following meeting will be held in September, but October is skipped, making November the next meeting to follow the one in September.
The lack of confidence in a rate cut in August leaves home buyers and homeowners awaiting a shattering of the current interest rates for at least another month, but likely longer if they are hoping for much lower rates than those available now. Again, even if the MPC surprises with a rate cut, it will not likely plummet the base rate or lender rates. The MPC will act cautiously knowing they can follow with another rate cut later and it would be harder to recover in the course of taming inflation if they make too large of a cut too soon.
Home buyers and home movers are not the only ones hoping for lower rates. Homeowners are in need of affordable remortgage rates. There are many homeowners that obtained their mortgage when the base rate was at an historic low. In turn, lenders offered their own historic record-breaking low rates. Those that chose fixed rates will have locked in their cheap borrowing rate until their term ends, which for many is 2024. As they say goodbye to their low rate, they can choose to remortgage or allow their lender to move them to their standard variable rate (SVR).
Avoiding a SVR is likely the best strategy because a remortgage would probably not only offer a much lower rate, but also the ability to choose a fixed rate to lock in the choice and gain peace of mind should the economy take a turn and rates increase. Experts encourage homeowners to avoid a SVR if savings is a goal.
The decision to wait for the MPC to vote for a rate cut has been the strategy for many since the start of the year, and month after month, the wait has been extended. Meanwhile, those that have been moved to a SVR hoping to find better rates than available now are paying more than necessary with each monthly turn of the calendar.
To discover remortgage offers and the benefits and opportunities available, it only takes a few minutes to shop online. Visiting the website of a remortgage broker allows the ability to gain remortgage quotes from a variety of lenders. The quotes could be reviewed and compared to determine the opportunities now rather than wait another month or even perhaps longer for rates reflective of a MPC cut already available. The savings by avoiding a SVR could be substantial.
Homeowners can also go from website to website of remortgage lenders to gather quotes, but it could have them missing out on an exclusive deal from lenders not offered directly to borrowers and only found with a broker.
The housing market is expected to benefit from the new situations developing in lending with lower rates, and due to more competitive asking prices. Inflation decline offers hope for the near future that more money will be left in household budgets which provides confidence in the ability to afford homeownership. Waiting has been the theme for the first half of the year, and waiting remains on the first rate cut since March 2020, but opportunities exist now and the choice to take advantage of those or continue to wait is a unique choice for each homeowner, home mover, and home buyer.