House prices have remained elevated after the buying boom created by the pandemic. There was a need for more space to accommodate lockdowns while working and studying from home. However, the major factor behind the buying frenzy was the low cost of borrowing. The Bank of England’s Monetary Policy Committee (MPC) had lowered the standard base interest rate to almost zero at 0.1%. Lenders then offered their own historical low rates. Borrowing was so cheap it offered an open door to those that had been struggling to get onto the property ladder and in homes that would have had to wait for an upgrade rather than as a first-time home buyer’s property. Sadly, those interest rates are long gone and now an old trend is back helping renters abandon high fees and buy their first home.

Homeowners are likely questioning whether to remortgage now or wait till next year when interest rates might be lower. The hope is to figure out which choice would offer the opportunity to secure a lower interest rate remortgage and save money. The answer is hard for some homeowners since rates now or next year would be higher than they have been paying. For instance, a homeowner may currently have a fixed rate that is lower than current rates and even lower than forecasted rates for next year. Also, forecasts are not always reliable and there is the possibility that the greater savings is choosing a deal now rather than waiting. For the homeowners coming to the end of their mortgage term with a lower rate than could be found with today’s rates, this has been an issue since 2022 for homeowners.

For the second time this year, the Bank of England’s Monetary Policy Committee (MPC) voted to reduce the standard base interest rate by 0.25% to 4.75%. The previous 5.0% base rate was from the first majority vote by the MPC to reduce the base rate of 5.25% to 5.0%. The reduction decision came in August, remained steady through September and with no scheduled meeting in October stayed at 5.0%. The two rate cuts for 2024 are a welcomed decision for borrowers as there had not been a reduction to the base rate since March 2020 when the MPC voted an historical low of 0.1% during the pandemic.

Those that have made the investment into buying their own home will be thrilled to hear there is likely to be strong growth in property values in the next five years. This is due to the expectation of the housing market thriving in the years ahead and taking on an average growth of £84,000 by 2029. The forecast from Savills is yet another one that backs the outlook of a strong and growing economy.

This Thursday, the Bank of England’s Monetary Policy Committee (MPC) will meet for one of the last two meetings of the year. This meeting is particularly important as it is expected it will result in a majority vote by the committee to reduce the standard base interest rate. The current rate is 5.0% and with the projected cut of 0.25% the new base rate will be 4.75%. If the cut does occur, it will be the second of the year.

UK house prices have slowed according to the recent release of data by Nationwide. Annual growth for the month of October was 2.4%, down from the two year high reported in September of 3.2%. This was unexpected as little changed from the prior month in mortgage rates and there remained the forecast for another rate cut by the end of the year. Worry about the housing market is misplaced as there is a strong boost to the housing market expected in the new year as the stamp duty changes motivate home buyers to take advantage of savings and buy.