There is an expected slowdown coming to the housing market according to some experts. It is not the expected natural correction that could occur to the market. Nor is the slowdown due to rising interest rates, though that could happen in early 2022. The slowdown to the housing market is expected due to a lack of supply.

The forecast for the Bank of England’s standard base rate is for interest rate increases in 2022. Emphasis is on the plural of increase as there are expected to be a few of them. In fact, one report has forecasted many increases in 2022 and continued increases over the next five years. With rising interest rates there is an expectation of a slowdown in the housing market. Making borrowing more expensive is likely to put some home buyers out of reach of the property ladder and discourage many from taking on an expensive mortgage debt.

Data released by LMS reveals that homeowners were anxious to take advantage of remortgaging opportunities in September. There were more than two times the volume of remortgages obtained and half of the deals were for five years with a fixed interest rate. The majority of homeowners are choosing fixed rate remortgages to create a safety net against rising rates.

There are strong warnings that interest rates will be rising in the coming year. Within two years, forecasts call for the Bank of England’s standard base interest rate to be in double digits. To build a safety net against rising rates and paying more than necessary, homeowners are seeking remortgages. With a fixed rate remortgage on a long term, a homeowner could lock in a low interest rate of today against expected rising rates.

The housing market continued to flourish in the month of October, despite the end of the stamp duty holiday that concluded the last day of September. Nationwide has reported the average house price has increased by more than £30,000 since the Covid pandemic crisis began and that the average house price has risen above £250,000 for the first time in Nationwide’s index reporting. The October data revealed an increase of 0.7% in October from the previous month. 

The holidays are only weeks away and the rush and hustle that is always a part of the busy season as we gather with family and friends and celebrate. Due to the Covid-19 vaccine rolling out and allowing this holiday season to be more normal than last, it is sure to put many more things to do on one’s check off list. However, at the top of the list, homeowners might want to make room for shopping and obtaining a remortgage. Doing so could offer peace of mind, a financial safety net, and perhaps a bit more cash in hand to have a very memorable holiday season.