Remortgages in Demand from Homeowners and Landlords
Remortgages have been in high demand from homeowners but landlords are just as keen to take advantage of the low interest rate deals being offered currently by lenders. In an effort to gain as much profit as possible from their property investments, landlords are looking to secure a low interest remortgage before lenders begin to pull their best deals in reaction to strong demand. According to research by Mortgages for Business 65% of buy to let mortgage activity in the first quarter of the year was devoted to remortgages. This is an increase over the previous quarter by 53%.
Much talk amoung experts has involved when the Bank of England will increase the standard base interest rate and when lenders will begin to pull the cheapest rates as high demand to cut into supply of lending funds.
The current rate set by the Bank of 0.5% has remained unchanged since March 2009.
David Whittaker, managing director of Mortgages for Business, said “The Bank of England will almost certainly raise interest rates before the next general election. And that will have a sharp effect on anyone caught out in less than twelve months’ time.”
There is expectation of the Bank increasing the rate by 0.75% in early summer of 2015 and again in the autumn by another 0.25% to 1.0%.
Despite the increase in house sales, demand for rental property remains strong. House sales have given a boost to property values which in turn has allowed homeowners to cash in on higher equity values with their remortgage.