Remortgages Harder to Obtain in Cautious Lending Environment
Remortgages may be harder to come by as lenders become more cautious in their outlook on risk of lending to borrowers. For homeowners that have yet to remortgage they will not only find the best remortgage deals have disappeared and have been replaced with higher interest rates but that approvals are hard to come by in the face of a second recession. Recent data on the GDP has shown that the UK economy is in the midst of a second recession and lenders are paying attention to the outcome expected.
Howard Archer, chief European and UK economist at IHS Global, remarked “The economy stuck one foot back through the recession door in the fourth quarter of 2011 as GDP contracted 0.2 per cent quarter-on-quarter.
“We suspect that the second foot will follow in the first quarter of this year as still pressurized and worried consumers limit their spending, businesses hold back on investment amid a currently very uncertain and worrying outlook, government spending and investment is pared down, and muted global economic activity dampens exports.
“No details were released on the expenditure side of the economy, but we suspect that GDP was dragged down by weaker business investment and a running down of stocks.
“There could also well have been reduced government spending. The decline in GDP was likely limited by some growth in consumer spending given that retail sales rose 1.1 per cent in the fourth quarter and by a limited positive contribution from net trade.
“Overall, we expect GDP growth to be limited to just 0.3 per cent in 2012, and the eurozone sovereign debt crisis continues to pose appreciable downside risks to the growth outlook.”
Remortgages are currently very attractive and some lenders are still optimistic. For a homeowner that could benefit from a remortgage deal the time is now to take a good look at what is being offered in the remortgage lending market.