The UK housing market has set another record. June data from Halifax revealed the fastest annual rise in 18 years. Prices rose 13% in comparison to May, which had been the largest monthly increase since 2004. The boost in the market, rather than the expected slowdown, is thought to be partly based on hopeful homeowners seeking to buy before the interest rates rise further.

The UK is expected to reach an inflation rate level of 11.0%. The Bank of England has told banks to keep more money available for buffering against the economic issues ahead and this will mean a tightening of lending with stricter affordability tests. Energy and fuel prices are expected to continue climbing. The information contained in the Bank’s recent Financial Stability Report.

Homeowners are taking advantage of the opportunities brought by remortgaging. The demand has risen for remortgages and was triggered by the many interest rate hikes made by the Bank of England’s Monetary Policy Committee (MPC). The rate had stood throughout 2021 at 0.1% until December when the first of five consecutive MPC meetings resulted in a hike to the standard base rate. 

The housing market has reached another high. Yes, another record breaking high during pandemic recovery and the highest inflation rate in many decades. Home buyers were not deterred by higher interest rates, or they could have been motivated to buy before they rise higher. According to Nationwide, the average UK house price reached a new record high of £271,613.

Shopping for a remortgage, according to experts, should be at the top of a homeowner’s priority list if they have not remortgaged already. Not only are those that have had their mortgage term end encouraged to shop, but those close to their mortgage term ending and even those not so close are encouraged to remortgage shop. Rather than face possibly higher interest rate choices in the future, some homeowners are choosing to pay a penalty fee to remortgage early and have options of current interest rates.

The UK housing market already is showing signs of slowing down. Hopeful home buyers are likely becoming less enthusiastic about buying at least right now. Asking prices are still high, with higher interest rates borrowing is more expensive, there is still low supply of available properties on the market, and with inflation it is difficult to save for a deposit. Unfortunately, the desire to become a homeowner has been made more difficult in a short few months and it is expected to get worse.