There might not be a better indicator of the future of the housing market than straight from those experiencing it daily, the estate agents. The latest survey data from the Royal Institution of Chartered Surveyors (RICS) reveals the agents are less optimistic than they have been in 14 years. The house price balance, which measures the percentage of rises and falls of home prices forecasted by surveyors fell to minus 68 in August, which is further down from the minus 55 recorded in July. This reading on the future performance of the housing market is the lowest recorded since 2009 and lower than the predicted minus 56 recorded in a poll by Reuters of economists.

The next meeting of the Bank of England’s Monetary Policy Committee (MPC) is turning out to be a must watch event much like that of a sporting event. There are different expectations and viewpoints being shared from MPC members, experts, and government officials as to what should occur. The next meeting will likely be lively as the MPC discusses the current state of the economy and whether inflation is under control. If the meeting on 21 September results in a rate hike, it will be the fifteenth consecutive meeting to have a majority vote to raise the standard base interest rate.

In news leading up to the next meeting of the Bank of England’s Monetary Policy Committee (MPC), there could be reason to take a deep breath and exhale for those hoping for financial relief. Inflation has long remained stubborn and reached double digits, which was far from the target rate of 2.0%. This required the MPC to make increases to the standard base interest rate. Starting in December 2021, and through to last month, there have been 14 consecutive meetings that resulted in a higher interest rate.

The final months of the year are going to shape the housing market data and will likely reveal a shift in the market that was inevitable due to more expensive borrowing from higher interest rates. According to Zoopla real estate company, the volume of houses sold in the UK this year will be the lowest annual figure since 2012. The forecast is for a 21% decline in sales for 2023 compared to 2022. 

Homeowners are seeking remortgages and they are doing so to save money despite higher interest rates. When a homeowner’s mortgage term ends, they lose their current deal and must seek a new one. That is why remortgaging is important and why now experts are encouraging homeowners to take time to shop for a new deal. Homeowners at the end of their term have the choice between a remortgage or they can allow the lender to move them to their standard variable rate (SVR). Avoiding a SVR is usually the better strategy, as it is normally a higher interest rate and therefore more expensive borrowing than the rates offered with remortgages.

The latest report from Nationwide has revealed house prices have fallen 5.3% year on year which is the largest annual decline since 2009. The annual decline for an average home amounts to £146,000. The monthly decline amounted to 0.8%. The average house price according to Nationwide’s House Price Index is £259,153, which is less than the July average of £260,828 and much less than the average last August of £273,751. There are many concerns about this being yet another sign the housing market could be on a long downward trend.