Following the report from Nationwide revealing there had been slight growth in the average house price in April, Halifax has reported the same with April growth at 0.1% in comparison to the same month last year. It is, however, the lowest rate of growth since December 2021 and it is a decline from the increase reported in March of 1.6%. The average house price declined from March by 0.3% to £286,896. 

The current average house price in comparison to the record high recorded last summer is £7,000 less, but it is still £28,000 higher than two years ago.

The Halifax report also revealed the changes in house prices within different regions of the UK showing the greatest decline in house prices of 0.6% in the south-east, while the largest growth was in the West Midlands with an average house price of £249,554. It is still below that of London where the average price, despite an annual decline of 0.2%, was reported at £538,409.

Kim Kinnaird, the director of Halifax Mortgages, remarked, “House price movements over recent months have largely mirrored the short-term volatility seen in borrowing costs. The sharp fall in prices we saw at the end of last year after September’s mini budget preceded something of a rebound in the first quarter of this year as economic conditions improved.

“The economy has proved to be resilient, with a robust labour market and consumer price inflation predicted to decelerate sharply in the coming months. Mortgage rates are now stabilising, and though they remain well above the average of recent years, this gives important certainty to would-be buyers. While the housing market as a whole remains subdued, the number of properties for sale is also slowly increasing, as sellers adapt to market conditions.”

The housing market is showing a slow down in comparison to the frenzy of buying during the height of the pandemic as buyers sought their pandemic lifestyle dream home of more space indoors and outdoors for the family. Now, with rising interest rates, what was affordable only a year ago is less affordable today. The Bank of England’s Monetary Policy Committee (MPC) will meet Thursday and another rate hike could occur. If so, it might be the height level reached of interest rate increases that causes a more severe stop for hopeful home buyers.

Home buyers must not only be concerned about affordability to purchase, but for the future and what interest rates that remain at this level or perhaps climb more could mean for their budget, especially one that has taken a toll due to inflation, higher energy costs, and the pandemic.

There are homeowners that are facing the reality of higher interest rates that no one could have imagined when they purchased only a few years ago. The two-year mark has come for those that secured a two-year fixed mortgage. At the end of their mortgage term, they will no longer have the choice of the historic low interest rate levels they were offered only years ago and have been paying on, but rates that are higher than seen in over a decade. 

This is why experts are encouraging homeowners to shop for a remortgage. Otherwise, without remortgaging, the homeowners will be put on their lender’s standard variable rate (SVR) which could be double or more the interest rate that could be found with a remortgage. 

It is also encouraged that homeowners consider a remortgage while their property levels are likely better than they will be should the housing market slow. The property value is important to the loan to value or LTV ratio used by lenders as one criterion for lending. The higher the property value over the amount of the loan helps the homeowner obtain better offers when remortgaging. Those with debt above their property value are said to be in negative equity and are out of reach of a remortgage and are prisoner to the SVR they will be required to pay. It would certainly be the case of a homeowner paying more than necessary to take on a SVR rather than remortgage.

It is simple and quick to shop for a remortgage online. Going to the website of a remortgage broker could put numerous quotes from a variety of remortgage lenders in hand to review and compare in a matter of minutes. Brokers might also offer exclusive deals from lenders that are not offered directly to borrowers. Homeowners could also go from website to website of remortgage lenders to gather quotes.

The forecast is for inflation to remain stubborn and the MPC to hike the standard base rate to at least 5.0% before it begins a strong trajectory downward towards the Bank’s target rate of 2.0%. Inflation was last reported at 10.1%, which is more than five times the target rate and it is why experts believe more rate hikes will be necessary.

Not only should homeowners consider what higher interest rates will mean for their budget, but also should home buyers. The economy is always adjusting to outside forces that rarely can be seen far ahead. The base rate of the Bank has shifted in response to many of those, such as the global financial crisis, Brexit, and the pandemic. Affordability now does not guarantee affordability in the future, and for newer homeowners that purchased during historic low rates caused by the pandemic, the adjusted future came quicker than they could have expected. 

Homeowners are encouraged to shop for a remortgage, and they don’t have to wait until their mortgage term is due to end. Keeping a watch on the economy, staying aware of the housing market, and shopping for a remortgage to discover strategies for savings is a smart plan in any economic or housing market shift.