Soaring inflation, rising energy and food bills, and higher national insurance payments from April, are all putting pressure on household budgets. While house prices continue to rise, with Halifax reporting that price growth hit a record high in January. This upwards trajectory could come to an end as people have less money to spend.
Halifax said the average house price was £276,759 in January, up £24,500 over the year, but warned that price growth slowed to 0.3 per cent that month. Although a continued lack of stock will support property prices to some extent, with buyers competing for the few properties for sale, Halifax forecasts that the rate of house price growth will slow considerably this year.
Remortgaging
With the Bank of England raising interest rates at back-to-back meetings in a bid to keep inflation in check, mortgage rates have already started edging up. However, borrowers shouldn’t panic as they are starting from low levels and with lenders awash with cash, those who want to attract borrowers will need to compete on rates. This is excellent news for borrowers taking out new deals or remortgaging this year.
If house-price growth stalls, that’s not necessarily such a bad thing. If you are moving to a bigger property, when price are rising your home may be worth more but you will also have to pay more for your next home. First-time buyers will also find it harder to drum up the necessary deposit. Transactions are a better measure of housing market health than property prices and encouraging more of these, rather than higher values, is much more desirable.
Get in touch
The best way to find a new mortgage deal or to check whether your existing product is the most competitive you can get, is to seek advice from a whole-of-market broker such as AWS Private Finance. We will look at all the deals on the market to find the right one for your particular circumstances. Get in touch for more information.
