Those that have made the investment into buying their own home will be thrilled to hear there is likely to be strong growth in property values in the next five years. This is due to the expectation of the housing market thriving in the years ahead and taking on an average growth of £84,000 by 2029. The forecast from Savills is yet another one that backs the outlook of a strong and growing economy.

The growth of the housing market by 2029 is forecasted to be 23.4%.

The areas where available properties are more affordable for home buyers are where the largest growth is forecasted, while those where house prices are higher there is less growth expected. The north of England is set to see large growth levels with the northwest realizing possible growth near 29.4%, and in the northeast 28.2%. 

Meanwhile, London and the southeast will see the lowest increases due to the already high house prices in those areas.

Affordability is still a concern despite the optimism in the future housing market. Prices are still elevated. The motivation to purchase will come from lower interest rates. Currently there are interest rates below the Bank of England’s standard base interest rate of 5.0%.

Tomorrow, the Bank’s Monetary Policy Committee (MPC) is likely to reduce the base rate by 0.25% to 4.75%. Further reductions are forecasted to take the rate to 3.75% by the end of the year. 

Considering the forecasts for the base rate, borrowers could easily believe that through to 2029 rates will reduce, but that is not the case. The base rate will likely reach a level and remain steady if the economy goes as it should. There will be no return of the historically low interest rates brought about by the global pandemic when the base rate was 0.1% and lenders were offering mortgages below 3.0%.

Savills noted the overall price increase across the UK will be near 11% when adjusted for inflation.

Lucian Cook, director of residential research with Savills, remarked, “With less external noise, house prices in the medium term will be dictated by the fundamentals of demand, supply and affordability.

“The direction of mortgage rates has been key to buyer decisions over the past two years. Decreased monthly mortgage costs are now feeding through into improved confidence amongst prospective buyers.”

While there are sub prime mortgage rates available, which means the rates are below the Bank’s base rate, the average two-year fixed mortgage is near 5.39% according to MoneyfactsCompare.

Shopping for a mortgage or a remortgage will help a borrower discover the best available deal for their needs. This is especially true for homeowners in need of a remortgage. While home buyers can step back from the lending market and wait for the right house price or right lending rate, homeowners at the end of their term must choose a new deal or allow their lender to transition them to their standard variable rate (SVR).

Rather than accept a SVR, which could be double or more the interest rate that might be found with a remortgage, homeowners should shop for savings. It is simple and quick to shop for remortgage quotes online. Visiting the website of a remortgage broker could offer numerous quotes from a variety of lenders. Brokers often have exclusive remortgage deals from lenders not offered directly from lender to borrower. Shopping online from website to website of lenders is also possible, though not as quickly as with brokers.

No matter how remortgage quotes are gathered, the information provided could lead homeowners to substantial savings and some homeowners will gain peace of mind as they lock in their chosen rate with a fixed rate. 

After tomorrow, if the MPC does indeed cut the rate to 4.75%, there should be more remortgage products quickly available to borrowers. Those deals should not be overlooked in favor of next year’s projected interest rates. This year has been an example of the length in which a borrower might wait for lower interest rates. The first cut of the base rate was forecasted for early 2024, then early spring, then summer and finally occurred in August. 

Perhaps it is best for those seeking financial security that risking time with a higher cost SVR to wait on a lower deal be avoided the possibility to save money after years of higher borrowing costs with a remortgage that could be obtained now.