Optimism among UK estate agents has grown to the highest level in two years. The Royal Institution of Chartered Surveyors (Rics) recent house price expectations score doubled to 36 in February from January’s score of 18. The February score is the highest since June 2022. The Rics report offers a strong insight into the housing market through the opinion of estate agents. Their hands-on experience within the market offers a unique viewpoint of both the current and near future market.

The expectations score is the measurement of the difference between the percentage of agents forecasting increases and those predicting declines in home prices. The Rics score is in line with other forecasts about the market, which has grown more optimistic due to the expectation that supply will grow, and purchases will continue as spring approaches.

The latest boost in the housing market is credited to the competitive lending that emerged as lenders cut rates to increase demand in mortgage and remortgage borrowing. Rates were so attractive they dropped below the standard base interest rate of the Bank of England. However, rates are climbing as lenders have been pulling their lowest deals prior to the upcoming Monetary Policy Committee (MPC) meeting on 21 March. 

Despite experts forecasting the base rate to remain steady next week at 5.25%, and despite the lowest rate offers being pulled by lenders, there is still a positive outlook. This time last year the inflation rate had entered double digits and the fight to bring it to the target rate of 2.0% seemed far into the distance. Inflation has dropped to only 4.0% which as it drops further will signal a probable rate cut by the MPC which would help home buyers.

There is also the normal spring housing market boost which experts are counting on as people emerge from winter and begin shopping for a home or a move. 

A lot of what will happen in the coming weeks will depend on the data released next week on the 20th concerning the new inflation rate and the decision of the MPC during their March meeting the next day on the 21st. The 16-year high base rate of the Bank is considered important in controlling inflation and therefore will not likely be cut this month, but the tone of the meeting will offer insight as to when a possible rate cut might occur. 

The Rics data from estate agents is also reflective of the attention from hopeful home buyers, such as those inquiring to agents for information. This activity is also an indicator of how the market might perform in the near future. It reveals there is activity occurring that could result in home purchases in the coming months.

Strong interest in house shopping and growing demand in the housing market is good news for homeowners. There had been the fear of a hard cooling off of the market due to asking prices remaining elevated and expensive mortgage rates, but buyers stayed in the market revealing again that the UK housing market is resilient. 

The demand in the market helps remove the fear of homeowners losing property value and slipping into negative equity which would put a remortgage out of reach. For homeowners coming to the end of a two-year fixed rate deal obtained in 2022, the inability to remortgage could be a heavy financial strain. In March 2022, the base rate was 0.50% and mortgage offers reflected the low base rate. Coming to the end of their fixed rate deal to face offers when the base rate is 5.25% could result in much more expensive repayments. 

No matter the higher rates, a remortgage is the best option at the end of the homeowner’s term versus being transitioned to the lender’s standard variable rate (SVR) since the remortgage is likely a much lower interest rate, therefore cheaper repayments, and a fixed deal could be chosen.

The housing market outlook from Rics is hopeful prior to the coming inflation report and the MPC meeting next week. Meanwhile, the opportunity to secure a remortgage deal that offers savings over a SVR is easy to find by shopping online.

Visiting the website of a remortgage broker could put numerous quotes into a homeowner’s hands from a variety of lenders. A broker website is a good starting point for remortgage shopping as they often have exclusive deals not offered directly from lender to borrower. Homeowners could also choose to go from lender website to website to gather quotes.

While the housing market is strong, property values should remain intact and possibly build equity for homeowners. It should be noted, despite a rate cut due this year once inflation is nearing target, offers are not expected to return to the low levels of 2022. Therefore, the best time to remortgage could be right now and if the homeowner is on a SVR or within six months of their term expiring then shopping for a remortgage could lead to savings and peace of mind.