The housing market has continued throughout 2021 to surprise even the most optimistic forecasters. Not only has low interest rates helped to motivate home buyers, as well as the now ended stamp duty holiday, but the pandemic actually spurred buyers into the market. Lockdowns caused by the pandemic had renters and homeowners reevaluating their homes. Most were left wanting more space, not only inside the home but outside as well where families and pets could easily spend time safely outdoors. The desire for space spurred the drive to buy and was dubbed the race for space.

There had been an expected cool off in the housing market due to the stamp duty holiday deadline that ended the discount savings at the close of September. The tax holiday had been installed at the beginning of the pandemic to help motivate buyers and keep the housing market active. It worked. Many believe it was the push start that helped bring buyers into the market despite the pandemic, lockdowns, and restrictions.

There are warnings of rising interest rates to come next year. It could be in the first quarter according to some experts if inflation continues its ascent and the latest discovered Omicron variant of Covid-19 has little impact on the economy and businesses. Once an increase occurs, there are warnings to expect several of them to follow. Some forecasters have offered a future with double digit interest rate levels from lenders in only two years.

Lending is currently very cheap. The Bank of England’s Monetary Policy Committee (MPC) lowered the standard based interest rate to the lowest level in 300 plus years in response to the global pandemic. Since lowering the rate to 0.1%, borrowers have been active in taking advantage of the opportunity to borrow cheaply. This is especially true in mortgage and remortgage lending.

Experts have been awaiting the data associated with the ending of the stamp duty holiday. The discount had been put into place to assist home buyers during the start of the pandemic. Keeping the housing market active would be vital to the health of the economy and it was hoped buyers would be motivated if there was an opportunity to save. It turned out that the stamp duty holiday and low interest rate levels were definitely motivators. The UK housing market surged and at levels that broke records for volume of sales.

Homeowners are taking advantage of the current low interest rates available with remortgaging. The interest rate is the cost the homeowner pays for their loan. There can be other costs involved with a remortgage or mortgage, but basically the main cost is determined by the interest rate. The lower the rate, the less one will pay and that is why homeowners are seeking a low rate now before the Bank of England’s Monetary Policy Committee (MPC) raises the rate and makes borrowing more expensive.