Interest Rate Predictions UK – Combat Rises with Green Energy

Interest Rate Predictions UK – Combat Rises with Green Energy

House Prices and Interest Rate Predictions UK

In 2022 homeowners saw a rapid hike in mortgage rates following a disastrous mini budget from Prime Minister Liz Truss coupled with surging inflation which led to the Bank of England hiking base rates from the 0.1% in response. 

The good news is UK Financial markets are finally predicting a cut in interest rates will be likely towards the end of the year. A fall in interest rates will hopefully see mortgage rates following suit however experts advise additional factors such as current inflation rates will also impact on when and how this might happen.

Falling Property Values

The impact of rising interest rates has led  to a drop in house prices of between 1% – 2% over the last 12 months according to leading house price indices. However, with rising mortgage rates the housing market has stalled with properties taking longer to sell despite the modest reduction in property values.

Coupled with the Cost of Living Crisis the pressure on home owners financially is mounting but could renewable energy upgrades help safeguard against rising monthly costs and falling property values?

How can Green Energy Upgrades help?

The current energy crisis has seen the cost of monthly energy bills soar over the last 12 months becoming extremely burdensome for home owners during the current Cost of Living Crisis. The installation of home Solar PV Systems will typically lead to a reduction in monthly energy bills of around 60%-80% depending on the size of the system and if a battery storage facility is added. There is of course the initial outlay of the purchase and installation of a home Solar PV system however with the majority of providers offering favourable financing options the reduction of monthly outgoings is still likely to be notable for most homeowners.

Homeowners with electric vehicles will benefit from savings of around £467 each year in comparison to public charging costs if installing a Home EV Charge Point. As an example an off-peak home charging rate of 10p kWh can be achieved using specialist EV tariffs provided by Octopus Energy. In comparison EV public charging stations average around 55p kWh for slow/fast EV charging. By contrast this is representative of a 450% increase in cost with costs rising further if using a rapid EV charging station.

These savings can be further optimised when coupled with a home Solar PV System which will in effect allow for the charging of your car for free from energy generated by your home.

In addition to savings on monthly outgoings, installing green energy solutions at home will also add value to your property and make it more appealing to potential buyers should you wish to sell, safeguarding against current somewhat stagnant property markets.

Interest Rate Predictions UK : Will mortgage rates go down?

On 9 May 2024, the Bank of England announced it was holding the base rate at 5.25% for the sixth time in a row.

However the BOE’s Monetary Policy committee of which there are 9 members saw 2 votes in favour of cutting rates by 0.25% which is up from just 1 member during the previous vote. This has led Experts to believe rates could be coming down soon.

Paul Dales, Chief UK economist at Capital Economics said:  

“We now think the recession will be shallower and growth will stay weak throughout 2024. It’s a softer landing for the economy, but the runway is longer. We believe the Bank of England won’t cut interest rates from 5.25% until late in 2024. But a stagnant economy will lay the groundwork for a more marked easing in price pressures in 2025 and more significant interest rate cuts. Our forecast that rates will be cut to 3% in 2025 is lower than the cuts to 4% priced into the markets.”

Mortgage Rate Predictions UK – What Can Home Owners Do to Mitigate Risks?

During periods of interest rate volatility it is essential for current and potential homeowners to do their research and shop around to secure the best mortgage deals in advance of current deals ending and/or before entering into new arrangements.

As discussed above green energy  upgrades to properties can not only help with the financial pressures of rising monthly bills, but also mitigate falling house prices making your property more appealing if deciding to sell or simply adding and maintaining value if not.

How Can E-Verve Energy Help?

E-Verve Energy have over 10 years of experience in the energy efficiency industry and are widely recognised as one of the UK’s most trusted installers, winning the National SME UK Enterprise Awards coveted title of ‘Most Trusted Renewable Energy Installer of the Year 2024.’ We are fully OZEV and MCS accredited, TrustMark approved and proud members of both RECC and CPA (consumer protection organisations that regulates and guarantees that all our work and customer service is carried out to the highest standard). This means that all projects are fully protected and completed by our accredited tradesmen. To find out more about how E-Verve Energy can help you with your Renewable Energy Project visit our dedicated Solar PV Page and EV Charging Page for your FREE design and quotation. Help combat rising costs associated with Interest Rate predictions UK today!

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