Finding Opportunity in the Midst of Negative Forecasts for Homeowners

Finding Opportunity in the Midst of Negative Forecasts for Homeowners

For a homeowner trying to build a strategy to survive and perhaps even thrive in the year ahead, researching forecasts and tidbits of knowledge can go a long way in planning. Unfortunately, trying to wade through the negativity and discover something that is helpful is difficult. The current forecasts include higher interest rates to come, continued financial impact from inflation, higher energy costs, a possible recession, falling property values, and more. It can be overwhelming to try and find words of wisdom to follow in the hopes of weathering through the difficulties experts have told to expect. 

It could be the noise of the negative is at a higher volume than the advice of experts revealing opportunities available, and its hiding tools readily available to strengthen a homeowner’s financial state.

According to economic experts, the housing market is due to suffer losses that will reflect the same situation experienced in the 1980s. For homeowners that lived through the pressures of that economic time, it could strike fear and prompt action to prepare. Others, unaware of the hardships and stress, could dismiss any need to plan. 

There is always the possibility that things could shift due to some unseen circumstance, but it should be noted that when forecasts are offered they are usually done so with the expectation that things will remain as they are into the near future, and forecasts are based on the experiences learned from the past. 

The concern of what is looming ahead is the next meeting of the Bank of England’s Monetary Policy Committee (MPC) that will happen this coming Thursday. On 2 February, the MPC is likely to raise the standard base interest rate by another 0.5% to 4.0%. If a rate hike occurs, it will mark the tenth consecutive MPC meeting to result in a higher interest rate.

The  doom and gloom theme of forecasts for the housing market could easily be waved aside, due to the many times the market turned out to be resilient when the opposite was expected. For instance, the lockdowns of the pandemic should have signaled a drop in the market. Buyers could not go out and shop in person due to lockdowns, consumers were concerned about the lack of income throughout the pandemic, and the many unprecedented unknowns ahead as the pandemic took hold on the economy. 

Instead, the market flourished as those feeling confined and troubled in living the pandemic lifestyle sought more room both inside and outside of the home. Renters sought to be homeowners as interest rates dropped to near zero and reached all time historic lows. The demand from buyers pushed house prices to break record highs month after month, yet low interest rates made buying possible and cheaper than in the past.

The above instance could be used as a strong example of how forecasts could be totally wrong. A homeowner could choose to remain optimistic that what they felt was a new normal will return, but it is important to understand that it was far outside the normal due to the result being due to a global pandemic. 

Experts accepted that perhaps the lockdowns were not going to impede hopeful home buyers from taking advantage of historic low interest rates that were making borrowing cheap. However, the unexpected surge in buying when rates were historically low prompted warnings that the historic low interest rates was not normal, would not last, and borrowers should prepare.

That time has come. The pandemic remains in the shadows, but our lives have returned closer to the normal we experienced pre-pandemic. Inflation was due to occur, and it has as spending returned in a wave as our lives caught up from lockdowns and restrictions. The historic low rate that existed until December 2021 grew to a rate of 3.5% by December 2022. 

The increase has put some homeowners on alert as their repayments have increased by hundreds of pounds. Those currently on fixed rate historic low mortgage deals are shielded, but only until their term ends. At the point of the end of their term, they will face choices from higher rates that are more expensive. 

The strain on a household budget could result in affordability issues. 

For homeowners, a remortgage could be helpful. They might not be offered the same historic low interest rate they were used to, but they could escape not only their lender’s risky standard variable rate (SVR) but further increases by choosing to remortgage with a fixed rate.

Shopping for a remortgage could be done at any time online by visiting the website of a remortgage lender. A quick quote could be in a homeowner’s hand in a matter of minutes with an offer that could protect a budget from some of the financial strains caused by the current economy. Visiting other sites of remortgage lenders offers quotes for the homeowner to compare.

A remortgage broker website offers an even quicker source to quotes to compare. Brokers work with many lenders to offer remortgages to their customers. They also at times have exclusive offers that are not possible to obtain directly from a lender. Therefore, a homeowner should consider shopping with a remortgage broker as well in their shopping efforts to find the best remortgage.

Change is happening. The economy is a result of the continued impact from the pandemic, as well as other situations, such as the war in Ukraine. Household budgets are likely to be strained in the days ahead, however how much is determined by taking advantage of opportunities available. For homeowners, one important opportunity to halt further strains could be a remortgage.

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