Recent information released from UK Finance has revealed that homeowners are still showing strong demand for remortgaging. There has also been demand for mortgage lending from first time buyers. The data released from the month of May revealed 30,720 new first time buyers completed mortgages which was 0.5% more than the same month last year. Remortgaging was 19.7% more than May 2018.
According to experts there is a large wave of homeowners that are due to have their mortgage deal end come October. They are encouraging homeowners that are coming to the end of their mortgage deal to consider a remortgage. Without a remortgage, a homeowner will be moved to their lender’s standard variable rate (SVR). For those homeowners, an SVR could be double or more the rate they are used to paying.
The housing market has remained resilient despite the worry of Brexit and the impact it could have on the economy. Home buyers haven’t been scared off as they discover low interest rate mortgages and home sellers willing to make a deal with more attractive asking prices. According to Halifax, in June the average house price increased by 0.3%.
Experts have been at odds lately. It seems that just as easily that one predicts a particular outcome with the housing market another predicts the complete opposite. Much of the back and forth and unpredictability is that no one is quite sure how consumers or the market will react with Brexit looming over the horizon.
The Office for National Statistics (ONS) reported that in May the house prices in London declined at the largest level since August 2009 which recorded a decline at 7%. Therefore, not since the financial crisis has there been such a dramatic decline. The annual comparison between May 2018 and May 2019 revealed a decline of 4.4%. It may not be at the same level as 2009, but ten years later it is the deepest since that time.
Homeowners are seeking remortgages to escape paying more than necessary on their repayments. Finding a low interest rate could help some to save a substantial amount of money. When a homeowner’s current mortgage deal ends and they do not remortgage they are moved to the lender’s standard variable rate (SVR). Experts are warning that for those that have had their mortgage deal end and those that are close to having theirs end that moving to a SVR could be risky.