There is growing optimism in the economy and housing market and that has helped to bring more properties to the housing market. In turn, because there are more homes for sale and because lenders have been dropping their mortgage interest rates, the forecast is for house prices to increase as buyer demand grows. There is not a buying boost expected like the major one that came about due to the pandemic lifestyle changes, but according to Zoopla, a 2% increase will occur towards the end of the year. This is good news for the economy, and for homeowners as their property values could increase and influence their loan to value (LTV) ratio when seeking a remortgage and bring about better interest rate offers.

Zoopla reported an increase of 16% in the four weeks to 21 July of agreed sales in comparison to the same period last year. Also, the average estate agent reported having more homes for sale than at any time in the past six years. This signals a possible hope for first time home buyers if home movers are upgrading to larger properties and will be putting their starter homes on the market. 

First time home buyers have had difficulty in climbing the property ladder. Interest rates rose, inflation made it hard to save for a deposit, and there were fewer affordable properties on the market for hopeful first time buyers. While house prices might rise, there is always the possibility of new buyers discovering competitive pricing as home movers seek to make a sale quickly to then complete their own purchase.

In response to the data released by Zoopla, their executive director Richard Donnell remarked, “The housing market is starting to hot up after a stone cold 2023. There are clear signs of growing confidence among buyers and sellers with many more homes for sale and buyers paying an increased proportion of the asking price.”

Zoopla reported home buyers are on average paying 96.8% of the asking price. This is the highest level in 18 months.

There are possibly a large number of home buyers awaiting a standard base interest rate cut by the Bank of England’s Monetary Policy Committee (MPC). The MPC did not have a meeting in July and voted to keep the rate steady at 5.25% in June. Inflation has hit and remained for the past two months at the Bank’s target rate of 2.0%, but due to some sectors of the economy dealing with inflation the MPC has put off cutting the rate. For instance, the services sector has inflation at 5.7% and failed to reach the forecasted level of 5.1%.

The next meeting of the MPC is this week on 1 August. There was hope of a rate cut early in the year, then it was postponed to possibly occur in spring, and now if it happens in August would come in summer and into the last half of the year. However, there are many experts that believe the rate will remain steady with possibly more committee members voting for a rate cut, but not a majority. This could signal a more likely cut to happen in September. 

Home buyers need not wait for the MPC decision as lenders have already cut their mortgage rates, with many below the Bank’s base rate of 5.25%. Even with the forecasted 0.25% cut to the base rate with a majority vote by the MPC, current mortgage rates can be found to be below the then 5.0% base rate with a cut. 

Shopping the housing market is likely to be a more hopeful experience for home buyers as they will find more properties and those willing to get a sell quickly and therefore pricing their home competitively. There will also be home movers looking to make a sell fast and putting a property on the market at a more affordable price due to the need of improvements and upgrades which offers a first-time home buyer a unique opportunity to purchase a cheaper home they can improve when and as they wish even perhaps taking on DIY projects themselves.

Also, because lenders are assured in their confidence a rate cut will happen sooner rather than later, interest rate offers are incredibly attractive even without a decision by the MPC. 

Homeowners might not find as low-level remortgage interest rates, but still, they could be much lower than any time this year. Shopping online for a remortgage could quickly offer remortgage quotes for a homeowner to review and compare to discover their own best lending deal.