The Office for Budget Responsibility (OBR) has issued a forecast for UK house prices. A decline is due to occur in 2023 until the autumn 2024. The end of the year is expected to reveal growth of 10.7% followed house prices down by 1.2% in 2023 and an additional 5.7% in 2024. Homeowners should go on alert and prepare with this information because with declining house prices might come lower property values which could put a homeowner into negative equity.

The Bank of England’s Monetary Policy Committee (MPC) is expected to close out the year with another increase in the standard base rate. It would mark the ninth consecutive meeting that resulted in a rate hike. The last meeting, which occurred this month, brought the rate to 3.0%. Forecasts are calling for the standard base rate to reach 5.0% or higher next year before the MPC would consider inflation is under control and declining toward the Bank’s target of 2.0%.

The cost of buying a home is considerably more expensive than it was this time last year. Interest rates have exponentially increased as the Bank of England’s Monetary Policy Committee (MPC) hiked the standard base interest rate during each of the last eight consecutive meetings. Last December the base rate was almost zero at 0.1% and now sits at 3.0%. Of course, lenders increased their interest rates, and it has left many hopeful home buyers outside the housing market, especially first-time buyers.

The demand for remortgages is strong as homeowners are seeking relief from rising interest rates. The Bank of England’s Monetary Policy Committee (MPC) has hiked the standard base interest rate at each of the last eight consecutive meetings. The first rate hike occurred last December and took the rate from an all-time historic low of 0.1% to 0.25%. Other increases have taken the base rate to 3.0%. More hikes are expected as it is forecasted for the rate to reach 5.0% or higher.

As data reports are being released, it is becoming more evident that what experts predicted could be materializing. The housing market is becoming different. It is leaving behind the era where buyers showed up no matter what. The resilience is breaking down. Caution is setting in and affordability is an issue as interest rates rise. The housing market is losing buyers, and homeowners don’t need that to happen, especially now.

New homeowners are being encouraged to take preparations for difficult times ahead. Many will be facing interest rates very different from the ones they were used to due to eight consecutive increases to the standard base interest rate by the Bank of England’s Monetary Policy Committee (MPC). In simplest terms, the interest rate determines the cost of borrowing. Last December, the base rate was at an all time historic low of 0.1%, now it is 3.0%. Homeowners coming off a fixed rate at the end of their mortgage term could find affording their repayments difficult.