Historically low interest rates were available until 2021, but then a series of global crises caused inflation and interest rates to go up sharply over the last two years.
That made mortgages less affordable, with rates going over 7% in some cases. In response, the Bank of England kept the base rate of interest steady over the last 18 months at a rate of 5.2% to combat the inflation that was pushing the cost of lending up.
Now, the Bank has one again cut the base rate to 5.2% and all indications from expert analysts in the field suggest that it will gradually fall to 3% by the end of 2026 as stability becomes the new watchword.
THat is great news for homeowners who are looking to move to a new home or remortgage an existing home.
Lenders have looked at the economic situation and started cutting their mortgage rates. Nationwide have offered a sub-4% mortgage rate for the first time in years and it is likely that other lenders will follow in due course.
That means that people are more able to afford a move, and statistics from Zoople in July 2024 show that market activity is at a high. More homes are coming onto the market, and more buyers are able to get affordable lending terms to buy those properties.
The overall confidence boost is a good thing for all homeowners. More people in the market means more competition for homes - and that means house prices are likely to go up.
Savills has revised its previous forecast and now believes that the average house price in the UK will increase by more than 20% in the next four years.
The second way homeowners can benefit is by remortgaging. This means staying in your existing home but renegotiating a better rate.
This is especially relevant if you had to remortgage two years ago when rates were rising and your monthly repayment cost went up.
Now, you can look ahead at the next 12-18 months and plan a new remortgage in your favour to cut those costs again.
Overall, this is a good time to look at buying a new home or remortgaging and existing one. Mortgage rates are looking favourable again and it will pay to move while the going is good.
Find out more about buying UK city centre property by getting in touch with our team today.