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Stability of rates – a much-awaited forecast
Is 2024 a good time to remortgage or to start property hunting? This article will give a mortgage market update and rates forecast.
I think it's pretty obvious that we won't be seeing the mortgage rates of 1% or 2% from recent years, possibly never again, however, rates do seem to now be edging below 4%, which is not too bad. And with two more Bank of England meetings to go this year, we could see rates nudge down further this side of 2025. In reality, the 1% and 2% rates that we had were never going to last forever and were not sustainable over the long term. Whereas rates around the 4% level are much more realistic and should be something that could be held for a long time.
Is the market becoming more stable?: Mortgage forecasting
I do however think that the real issue that people have, has been less around the rate itself and more around the instability in the market. What we all want is to know that what we are committing to is not going to suddenly go crazy, as it did under the very short tenure of one Elizabeth Truss! When we are committing to a new mortgage deal, one way of ensuring stability is to take a fixed rate, perhaps 2 years, 3 years or even 5 years. But we also need to feel secure that at the end of the fixed rate there that there will be similar deals available for us to jump on. Since the Truss mini-budget, now almost a distant memory, the rates seem to have been going up, down and all around, and that causes us to worry and wait. But the overriding feeling from financial experts now, is that things have settled down and that apart from perhaps a few small reductions that could come in the next few months, things have settled and we are in for a long period of stability.
This market forecast should hopefully give everyone the peace of mind to lock into a decent fixed rate now, perhaps a decent 3-year rate is long enough to see what will happen. This approach would work with either a remortgage or a purchase.
If you are looking to buy a new property then of course you also need to think about house prices. An unstable market keeps people from committing to something new, which has the effect of forcing house prices down due to supply and demand. I suspect as we see the market stabilise that property prices might start to creep up again. So perhaps now is a good time to start looking and buying a property, knowing that over the next few years, its value may well start to creep up again.
In conclusion, I think that it’s all about stability and affordability rather than the headline rates. And it certainly feels that the market is at last starting to steady out and give homeowners and buyers more confidence moving forward.
Being mortgage savvy
To check you are on the best rate possible and never pay a penny more than necessary, you can sign up for our Free Mortgage Monitoring service.
Another way to be mortgage savvy is to check out some of our other mortgage articles by Rob Starr, such as fixed-rate mortgage options that are available with Crunch, and why you need a mortgage broker.
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