The UK housing market has escaped the cold temperatures of January and made a turnaround during the month of February. According to the latest housing figures from Rightmove, the average house price across the country increased 0.8% during the first month of the year and pushed the selling price to £300,001 entering the month of February. The average selling price for a property in January was £297,587. The average selling price is not the only thing which has seen change in the last thirty days.

In November of last year the Bank of England hiked the standard base rate 0.25% to its current level of 0.5%. This rate is higher, but well within the range of being historically low. House owners felt an increase in the amount they were paying for their monthly mortgage payment if they owned a lending product featuring a Standard Variable Rate or Tracker Rate.  Housing specialists see the first increase in interest rates last year as a possible sign the inflation rate is being met head on by the Central Bank.

Homeowners are taking advantage of the remortgage opportunities being offered by lenders. According to LMS, the volume of remortgages increased by 41% year on year in December 2017, from 28,400 to 39,943. There was also an increase in the month to month volume from November to December likely due to the Bank of England’s Monetary Policy Committee (MPC) pushing the standard interest rate from 0.25% to 0.50%. 

What was once quite low on the list of valuable mortgage lending products, remortgage is making itself known as a more popular tool than ever before. According to the latest data from LMS, remortgage increased in demand last year and claimed a spot among the most valued methods to reducing outgoings. Remortgage activity increased year on year during the month of December 2017 and totaled 39,943. This is a surge of more than 40% from 28,400 in December 2016.

First time buyers remain a pillar of strength for the base of the future of the UK housing market. Until recent changes due to government programmes, it has been quite difficult for first time buyers to reach any part of the housing ladder. Help to Buy along with recent changes brought about from new stamp duty rules implemented in November of last year are making it more possible than ever before for new buyers to enter the housing market and be successful doing so.

UK housing market lending is at the mercy of the standard base rate and ultimately what happens with inflation. Last November, the inflation rate stood at 3%. This is a level which is higher than the target rate of 2% set by the Bank of England. The Central Bank is charged with holding inflation at the 2% rate which is now again sitting 30% higher than the target rate. There are whispers of a possible rate hike coming in the coming weeks.