Yet another report has shown that the housing market was still on an upward trend in January. According to the Royal Institution of Chartered Surveyors (RICS), 16% of respondents reported they had an increase in demand from hopeful home buyers. There was a 9% increase from December, which had given the strongest reading since the stamp duty holiday reached its peak in May 2021. 

Much of the boost is considered to be a result of the Bank of England’s Monetary Policy Committee (MPC) increasing the standard base interest rate in December. It was expected that an increase would occur in the start of 2022, but fast growing inflation required one earlier. The next MPC meeting was scheduled for February and yet another rate increase was forecasted. Rather than face losing the opportunity to borrow cheaply at the then low interest rates, home buyers flocked to the housing market in January.

The MPC did raise the standard base interest rate in February, which in December went from the historic low of 0.1% to 0.25% and then to the present 0.50%. 

There are likely home buyers still in the process trying to purchase property and escape higher interest rates. It could take a month or more to reveal the true state of the housing market. Experts believe that the market will likely slowdown soon. With borrowing more expensive due to rising interest rates, and house prices at record high levels, motivation to jump onto the property ladder will falter. Especially due to the fact that more interest rate increases are expected as inflation continues to impact the economy.

The forecasted interest rate increases are also pushing homeowners to borrow now before more rate hikes. Remortgages are more popular as they are an escape from rising interest rates and paying more than necessary. By choosing a deal with a lower interest rate savings is possible. Choosing a fixed interest rate remortgage locks in the savings against rising rates during the length of the term.

While there have been two interest rate hikes in back to back meetings by the MPC, rates are still very low. Certainly lower than they could be as each meeting of the MPC passes. 

Experts imagine that the slowdown to the housing market will happen in spring. However, remortgaging should remain strong in demand throughout the year. 

For home buyers, there are considerations to either buy now before rates increase again, or to wait out the market and allow house prices to decline. 

For homeowners, there is no time like the present to shop for a remortgage. Going online to shop with lenders or with a remortgage broker could put quotes into hand that can be reviewed to reveal the best remortgage. Then taking action could result in savings that will help now and provide a buffer as the MPC increases rates even more, as is forecasted.