Homeowners showed less enthusiasm for remortgaging in April according to the latest figures from UK Finance. In comparison with April 2018, there was a decline of 6.2% in the volume to 9,140. The value of the remortgages declined as well by 8.1% to £3.3 billion. However, homeowners were remortgaging to borrow more compared to the same time period last year.
Homeowners are showing up in the remortgage lending market and finding great deals. At least that is the case if they are indeed choosing to remortgage. Yet, there are thousands that are likely not taking action. That is confusing to the experts that day in and day out try to advise homeowners to not overlook the opportunity to remortgage that is there. After all, why would anyone want to pay more money on their mortgage if they don’t have to do it? Isn’t it like just throwing money away? Who would choose that over saving money?
Many homeowners are taking advantage of the opportunity to remortgage and release cash from their built up equity. The money can then be used for anything the homeowner wishes. The expenditures of the money are as unique and varied as there are homeowners. Some will use the money to fund a dream summer holiday while others will invest back into the home to update and upgrade its value, such as building out a new kitchen, a new bathroom, or build an extension.
The Bank of England’s Monetary Policy Committee (MPC) has voted to keep the standard base interest rate steady at 0.75%. This had been the expected outcome of the meeting by experts. There is still uncertainty ahead in the year with the Brexit delay. However, there is the need as for the MPC to keep inflation in control and close to the target of 2.0%. Keeping it close to target will sustain growth and employment.
Housing market reports are sounding the alarm that house prices are still declining in London. Still declining being their keywords. London had through many years, especially during the recession, had vibrant growth in their house prices. That growth helped the average house price in the UK from looking as bad as it did without the growth of London’s properties. The property value growth was so strong that it reached levels making properties out of reach. Any declines were looked at as a normal and much needed correction to the London housing market by many experts.
At any given time there are homeowners facing the end of their mortgage deal. When the term on their mortgage ends they have choices, one is to take action and get a remortgage and the other is to do nothing and allow their lender to move them to their standard variable rate (SVR). Not too long ago moving to a SVR wouldn’t have been so bad as they were attached to relatively low interest rates. That is no longer the case as some SVRs are double the rate of a homeowner’s mortgage interest rate if they mortgaged two or more years ago.