The determination of UK home buyers can be seen in the latest house prices data which revealed that while the average house price increased last month, it was at the slowest growth rate since July 2020. Interest rates have caused mortgages to surge upward in cost. Repayments are taking up more of a home buyer’s income, and as homeowners many are facing possible negative equity and perhaps even worse as interest rates rise.

The Bank of England has warned that more interest rate hikes are to come to help take control of rising inflation. The warning is accompanied by more as it is suggested homeowners prepare to face mortgage distress as they face higher repayments. To secure a safety net against the rising rates, homeowners are encouraged to shop for a remortgage. Through choosing a fixed rate remortgage deal, a homeowner could lock in an interest rate and avoid the impact of further rate hikes.

Another warning has come that home buyers could be about to exit the UK housing market. According to a recent report, a mortgage is no longer less expensive than rent. Of course, there are other warnings as well such as higher inflation to come, higher interest rates, continued record high house prices, and a lack of supply in the market, but the ability to save money by taking on a mortgage rather than renting was a strong motivation 

House prices are forecasted to decline as affordability becomes an issue for hopeful home buyers. Yet, buyers are still showing up in the UK housing market as the opportunity to buy before interest rates rise further is a motivation for some. There is also the desire to buy for the same reasons as showed during lockdowns as many home buyers still express interest in finding more space in a new home. The latest house price data from Halifax reported between August and September a decline of 0.1% but taking a hard look at the data reveals more.

Homeowners should be alert to the rapidly changing lending environment. One could end up paying more than necessary if a smart financial strategy is not put in place. There are many factors at play taking a toll on a household budget, including inflation, higher energy costs, and higher interest rates. Of course, many households are still in recovery from the impacts of the global pandemic. The need for savings and relief is deep. There are benefits and opportunities available to homeowners through remortgaging that could offer savings and stability as interest rates rise to combat inflation.

Homeowners are choosing to take on a safety net with their remortgage by choosing long term fixed deals. In a recent report, a third of remortgaging homeowners noted they would only consider a long-term fixed rate to secure a current interest rate rather than face future rates. The Bank of England’s Monetary Policy Committee (MPC) is expected to make increases at each of their final meetings of the year which are scheduled for November and December. There is not a meeting scheduled for October, but the Bank has warned they would call an emergency meeting if needed.