January 2025 Newsletter
Happy New Year!
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I think we were all expecting a bit more from 2024. We started off the year with a positive outlook, surely interest rates would decrease and the property market would bounce back.
Unfortunately progress has been slower than we would all have liked.
In todays newsletter I'll be looking at what happened with inflation across the year. I'll also dig into the remortgage process and what to expect.
Latest News
Last year we were heavily battling inflation, which sat at 3.9% in January 2024.
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In simple terms, Inflation is where there is too much money in circulation, this leads to the public spending a lot more on goods and services. This higher demand drives prices higher and leads to inflation. Obviously there is a lot more to the situation we found ourselves in, but this is just a simple view.
To tackle this, the Bank of England raises the base rate to make lending more expensive which in turn curbs spending.
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At the beginning of the year, inflation sat at 3.9% and the Bank of England Base Rate was set at 5.25%. At that time we were all hopeful that inflation would drop dramatically across the year. Unfortunately this wasn't the case. Although inflation has reduced, we haven't seen the big changes we were hoping for.
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Today inflation is sat at 2.6% and has been slowly rising. Rob Wood, a UK economist at Pantheon Macroeconomics, talked to the financial times and predicted that this number is likely to rise above 3% in the spring.
The base rate has reduced to 4.75% after some positive movement on inflation earlier in 2024, but we can't accurately predict what might happen in the coming months. The only certainty is that any changes will happen slowly and very cautiously.
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You'll see from the rates below, there hasn't been a big difference in the banks interest rates year on year.
However, if there's anything we have learned in the past year, it's that life goes on regardless. So, whatever happens with interest rates, life changes, properties are sold and bought while remortgages still come up for renewal.
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I've been working with clients in the past year to ensure that this slow moving economic situation has as little as possible effect on their budget and lifestyle. Prioritising, personal circumstances and making sure that life keeps on moving.
Mortgage Rates Today Compared to Jan 2024
What Can I Expect at Remortgage?
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Anyone on a fixed or tracker rate will find that their special rate will eventually come to an end. You will most likely have selected a 2 or 5-Yr rate.
When your special rate comes to an end you have two options, you can either move on to the lenders standard variable rate, which is extremely high compared to their special rates.
Or you can remortgage, either with a new product with your existing lender, or move to a totally new lender.
I always think that there is no reason to pay more than you need to, especially when it comes to paying a banks interest. So, it's always your best bet to review the whole of the market and make your decision on the cheapest rate available at the time.
I've written a more detailed account of what happens when you remortgage to a new lender in this article:
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But please do always get in touch to talk it through,
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Approved by In Partnership FRN 192638 January 2025
Jen Boulter