What will happen to interest rates?
How will the housing market perform?
These are the questions that we would like the answers to so that we can plan ahead and make 2015 a success.
This is the all important area as it will determine how much we pay on our mortgages this year. Everyone is in agreement that the Bank of England will at some point put up the Base Rate from its current level of 0.5% but when and by how much?
For the "when", let's look at some experts:
Howard Archer of Global Insight - first rate rise will be in August 2015
Nina Skero from the Centre of Economic & Business Research - November 2015
Bank of England Forward Guidance - late 2015
To this illustrious list we can add Dave Warboys of Welcome Mortgage Solutions Ltd - October 2015.
Most economists agree that the Bank of England will put rates up in late 2015 and so it would certainly be a surprise if anything happened in the first half of the year.
As for the "how much" interest rates will rise, this is harder to predict. I will borrow information from the latest Inflation Report which outlined the expectations as below for the AVERAGE rate of the Bank of England during the relevant year:
2015 - 0.8% average during the year
2016 - 1.4%
2017 - 1.7%
This is encouraging as it shows a slow steady increase that should be more manageable for us all rather than a sudden rise which will leave our finances in ruins.
Having looked at lots of opinions for the housing market from mortgage brokers, estate agents, Rightmove and many others, for once there seems to a general agreement on a figure.
In 2014, house prices rose by 7.2% on average across the country (with regional variations particularly in London of course).
For 2015, a host of experts have predicted a rise of 4% during the year. So not as good as last year but a healthy and sustainable increase. Good news.
Savills have been very obliging in providing a long term forecast for house prices which does not agree with this initial figure but offers plenty of encouragement for the future. Their predictions is as follows:
2015 - 2% increase
2016 - 5% increase
2017 - 5% increase
2018 - 3% increase
2019 - 3% increase
I am the eternal optimist and can see lots of positive signs in the mortgage and housing market for the start of this year and so I am going to stick my neck out and predict that house prices will rise by 5% during 2015.
All we can do now is sit back and enjoy the year to see what develops. We will review this again in 2016 to see how we got on and in the meantime I would like to wish you a happy and prosperous 2015.
As always should you have any questions, queries or wish to discuss anything further, please call me on 0844 736 1920.
And remember that your home is at risk if you do not keep up repayments on your mortgage.