While buying a home can feel like sinking into a major load of debt, at the same time it is considered an investment. That is if the home continues to add value. The value is of course a tricky thing to predict. Just like one runs the risk in investing in other things like savings, stocks, or even crypto currency, a home could come out to be a major win or a loss.
Interest rates have become increasingly lower when attached to mortgage and remortgage borrowing. Lower rates mean cheaper costs to borrow and since mortgages and remortgages tend to have such large values it makes sense to secure the lowest rate possible. When it comes to remortgages, it was recently reported that homeowners choosing to remortgage in May found an average savings of over £400 per month. Such a savings would be quite welcomed in an uncertain pandemic impacted economy.
LMS has reported that homeowners in May remortgaged and saved on average £441 per month. The substantial savings is a result of continued low interest rates deals of which some have recently been introduced at below 1%. This is good news for homeowners seeking to save money with a remortgage, or for those seeking a fixed rate deal to secure a safety net against rising rates. Many have not only secured a lower fixed rate deal, but have put cash into hand with an equity cash release remortgage.
While lending was seeing a boost in mortgage demand due to the 30 June deadline for the stamp duty holiday, remortgages were increasing in demand as well. Homeowners have been turning into home movers to search for their own pandemic lifestyle dwelling, but many have also decided to stay put. In doing so, they didn’t have to abandon their desire for a change in lifestyle, but instead funded improvements, upgrades, and changes with a cash back remortgage.
Home sells grew to the highest level on record as buyers sought to escape the end of June deadline of the stamp duty holiday. HMRC reported that there were 213,120 property sales in June. The deadline had been set for the end of March, but was extended until the end of June. The same rush to buy occurred in March, and will likely happen again in September. The June deadline only met with a reduction of the tax relief for home buyers. The total end of the stamp duty holiday will be 30 September.
June was the busiest month ever for the UK housing market according to Rightmove. Sales reached a feverish peak as home buyers rushed to buy and take advantage of the stamp duty holiday before the deadline of 30 June. The tax relief opportunity has now been reduced and will return to the normal tax level at the end of September. The high demand pushed the average asking price into an all new high.