Remortgaging activity has increased significantly in recent months, helped in no small part by record low mortgage rates and continued house price rises across some parts of the country.
This combination is helping homeowners, including buy-to-let landlords, remortgage to a lower loan-to-value (LTV) and save huge amounts on repayments in the process, so it is no wonder remortgaging has reached record levels, surging to 39% of all mortgages, according to The Mortgage Hut.
The proportion of buy-to-let remortgages has risen by 8% over the last 12 months, thanks to a sharp increase in mortgages available for landlords, presenting them with an opportunity to switch mortgage firms to find more attractive rates.
Remortgaging overall is up almost 10% year-on-year, supported in part by the fact that lenders have launched some new products widening criteria to more niche markets, helping to drive remortgaging.
Chris Schutrups, managing director of The Mortgage Hut, said: “Many homeowner and landlords who have been saddled with lenders on less than competitive interest rates, or stuck on higher standard variable rates, have been able to switch to new lenders.
“Rising property prices has also had an impact on remortgage growth, especially in London and the South East. Many homeowners have chosen to reinvest in their property, by putting on an extension or refurbishing the property, rather than moving, which can be much more expensive. For example, home owners moving to a £600,000 property need to find £24,000 for the stamp duty, plus removal costs and estate agents’ fees that could exceed £7,000. However, a single story extension can cost between £25,000 and £85,000, and a loft conversion from £35,000 to £60,000.
“Homeowners are seeing some down valuations creep into the market as confidence from recent good times have been met by some caution by surveyors who have generally err on the side of caution.
“We expect to see the demand for remortgaging continuing to rise in 2018, especially if there are further rate rises. There is likely to be a shift towards more consumers considering five year fixed rates, as the risk of rate rises remain for the time being.”