During the pandemic, the rural countryside offered everything one would need or want to escape the confining surroundings of lockdowns. There was such a demand for more area both inside and outside the home that it became known as the Race for Space. Home buyers were searching for more space indoors to offer room to work from home privately, for children to study, for the family to enjoy entertainment, and for keeping fit while being banned from local gyms. Now that remote working is coming to an end, lockdowns seem to be in our past as the amenities of city life are once again in demand.

The cottage lifestyle that was less hurried and offered serenity, peace, and green spaces safe from restrictive lockdowns as well as the Covid virus is becoming less desirable. There is now a shift in sales with city properties in higher demand and countryside properties going onto the market. 

The shift of those seeking to return to the city could keep the housing market active for a few months to come. It could then give the holiday gift to homeowners of keeping property values elevated. Despite the move from the countryside, it will likely be a beneficial shift of ownerships. The rural areas have usually been an affordable starting place for first time buyers. Therefore, as sellers become more motivated to go to market, it might present buying opportunities for first time buyers that had found the market unaffordable in the past few years.

The housing market has been forecasted to decline as interest rates have risen. The Bank of England’s Monetary Policy Committee (MPC) has increased the standard base interest rate at each of the last nine consecutive meetings. Those nine meetings started last December and carried throughout 2022.

Last December, the base rate was at almost zero, and was raised from 0.1% to 0.25%. Each meeting afterwards throughout this year resulted in yet another increase. The base rate is now 3.5% and is forecasted to rise further in 2023. The Bank’s rate could rise to 4.5% or higher before the MPC considers it is high enough to bring inflation under control.

Meanwhile, the housing market showing life after rising rates could be beneficial to homeowners. It has been a concern of experts that house prices could fall quickly and with it property values. This could have consequences for homeowners that do not have an equity buffer yet built into their home. Newer homeowners are at risk of negative equity where their property value declines below the debt of their loan.

If this occurs, they would be out of reach of remortgaging. When their mortgage term ends, if they do not remortgage, they will be moved to their lender’s standard variable rate (SVR) which is usually a higher and therefore more expensive rate. Rather than paying on a more expensive rate and be subject to increased rates, a homeowner that remortgages could lock in a rate with a fixed rate remortgage and save. They would save from not having to pay on the higher SVR and not having to pay when rates rise further.

There are tens of thousands of homeowners that will come to the end of their mortgage term in the beginning of the new year. Most will have obtained their term when interest rates were at historic lows. Unable to stay with that rate they will be facing those attached to a remortgage or the riskier SVR.

Despite rates being higher than they were last year or even the two years prior, a remortgage is still a smart strategy to save money and to shield one’s financial situation from the impact of even higher interest rates.

It is easy to shop for a remortgage online and determine the benefits available. Visiting a remortgage lender site could put a quote in hand to review in a matter of minutes. Going from site to site offers quotes to compare. It is even quicker and easier to visit the website of a remortgage broker. Brokers work with many lenders at one time and a homeowner could get several quotes from a variety of lenders as well as exclusive offers the lenders would not offer directly.

The Race for Space may be coming to an end, but it could trigger a change that offers opportunity for those looking to upgrade, for first time buyers, and for sellers that could not find buyers previously for their city properties. Overall, it could keep the UK housing market active when most feared it would cool down and cause further strain on many budgets, particularly first-time homeowners.