In October £29 billion worth of fixed term mortgages came to end. Those homeowners were left with an opportunity to remortgage and likely save a substantial amount of money due to the historically low interest rates being offered by lenders. The homeowners that did not choose to remortgage were moved to their lender’s standard variable rate (SVR) and in comparison to the interest rate they were probably paying on the deal that ended, they are saving money, too. Just not as much of a savings, nor is there much security that the savings will last for long.

Homeowners have been given a forecast that should have them putting remortgaging on the top their priority list. According to data from the Office for Budget Responsibility (OBR), mortgage interest payments are set to rise to the highest level since at least 2008 within the next two years. The OBR report suggested that interest rate payments could increase by 13% in 2023 which would be a drastic hit on household budgets that are now enjoying historically low interest rate levels.

The UK housing market is not expected to slow down anytime soon as the demand from hopeful home buyers is still strong. Despite the pandemic closing in on ending with the vaccine rollout, the desire for a pandemic lifestyle home remains. Buyers, whether first time buyers or home movers, are shopping for space. More space inside for privately working at home, studying, entertaining, and getting fit as well as more space outdoors.

In the latest release of the HM Land Registry, we were reminded that even the data compilation of UK House Price Index has not been free of impact from the pandemic. The data released is accurate, but revisions may be made as more data becomes available. Currently, like other house price reports, the Land Registry report is showing an increase in the average house price. August data revealed that there was a 2.9% increase over July. The annual price increased by 10.6% making the average UK house price £264,244.

Homeowners have a variety of remortgage products available to choose between from lenders and brokers. The competition for borrowers has led to lower interest rates and creative offers to gain their attention. In just the past weeks, more and more deals at 1% or less interest rates have come available. It would seem the choice would be straightforward as to which deal should be chosen, but there could be much confusion, especially between the choice of a fixed rate deal or one with a variable interest rate. 

For the first time since 2007, asking prices in the UK housing market rose for all regions. Buyer demand is still strongly outpacing supply and that is pushing housing prices upward. Month after month since the pandemic began, buyers have been seeking homes with more space and those that fill the unique needs for their pandemic lifestyles. This has helped push up asking prices in areas often less popular such as those in the rural countryside.