With 2017 coming to an end and the festive season in full swing, now is a great time to look back at the changes we have seen this year and look ahead to what 2018 may bring.
The mortgage market has seen some substantial changes this year. In particular, the Bank of England (BoE) base rate rise announced last month, and the Prudential Regulation Authority (PRA) receive significant changes to the assessment criteria for Buy to Let mortgages have impacted the market. Nevertheless, there is still very much a positive outlook among market commentators going into the New Year.
Whilst house price growth is predicted to remain low throughout the course of the Brexit negotiations, long-term highs are predicted. In London, for example, cumulative price growth over the next 5 years is positive at 13.1%1. This future growth is not only restricted to London and the prime property market, with price growth also forecast in the Midlands, the East and the North West of England.
More rate rises to come?
The base rate rise in November meant that the cost of not remortgaging if you are on a tracker mortgage has gone up by 0.25%. Some market commentators have suggested that rates might rise again. This makes it even more important to review your current and upcoming mortgage requirements as we head into the New Year. You may wish to consider switching to another product sooner rather than later.
It has been estimated that 4 million households in the UK remain on their lender’s Standard Variable Rate (SVR) after their initial term has come to an end2. It is important to remember that a SVR is generally higher than your initial fixed rate (although it can also be lower), and could further increase with future rate rises.
Staying off your lender’s SVR and remortgaging onto a lower fixed rate could save you hundreds, or even thousands of pounds in the long run. If you act fast and remortgage now, you could even save money in time for the New Year.
Despite the possibility of further rate rises, homeowners should not become anxious, as interest rates are still expected to be low in the near future compared to long-term norms3. Additionally, the BoE has the option to reduce the base rate if Brexit negotiations were to become rocky4, providing an economic safety net.
Buy to Let remortgaging
With rates rising, regulatory changes and tougher underwriting rules, it is very important that Buy to Let investors weigh up their options carefully5. Landlords are likely to evaluate their portfolios going into 2018, in order to adapt to the new regulations and taxation rules.6
There are still some great fixed rates available for landlords who are looking to remortgage their Buy to Let properties to save on their monthly repayments. Those who are interested in switching their mortgage product should do so quickly, to secure a low rate before further possible rate rises.
Whilst landlords have been hit with some substantial changes this year, they can remain positive as 2017 draws to a close. Strong market growth has been predicted in the long run, with an increase in house prices, and there are still some great remortgage rates available for both Buy to Let and Residential products.
If you are interested in remortgaging, contact us today to speak with a specialist Mortgage Manager on 0207 519 4985, or send us an email.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.