Remortgage Deals Are Making a Triumphant Return in the British Property Market
- By Howard Ogollegos
- Published 09/27/2011
- Real Estate
- Unrated
There has been some recent good news for homeowners with a major lending organisation reporting a large upturn in mortgage lending. The Council of Mortgage Lenders has issued a report showing an increase in mortgage approvals which are a boost for homeowners who have been faced with a limited number of remortgage deals over recent years.
The CML's figures are some of the most widely used in the industry as they are the largest and most established lenders organization. The data showed that whilst lending in March 2011 was GBP 200 million below the figure twelve months previously, it had risen by over one fifth from February.
News of these new lending statistics has been much appreciated by the many buyers who have been unable to obtain funding for house purchases or remortgages over the past three years. People looking for remortgages have been unable to move to better rates during this time due to the mortgage lenders tightening their criteria.
The past decade saw masses of unsecured debt being secured against properties by using remortgage funding, which was a contributing factor to the mortgage and property market crisis over the past few years. Of course, the financial crisis stretched across many UK sectors, and so many people faced unemployment and were no longer able to keep up with their new higher mortgage repayments.
With fewer remortgages available, increasing numbers of households are struggling to maintain their personal debts. A recent study by the BBC found that personal debt was one of the biggest individual stresses in the UK with the nation owing a collective GBP 1.4 trillion.
And, struggling lenders are taking increasingly draconian steps to recover monies from debtors.
Many homeowners who managed to survive the financial crisis are still sitting on high levels of debt, and so it is welcome news that they may now be able to consider a remortgage in order to assist with their monthly expenditure and reduce their outlay on debt repayments.
Although household finances remain stretched thanks to tax rises and higher than expected inflation, the CML are optimistic that the housing market has improved in the last twelve months. The general view of mortgage lenders is that the availability of home loans should increase in the second quarter of 2011 although the increase may not be as positive as some had hoped.
A leading economist from the CML points to the fact that the demand for remortgages in the UK remains steady. Bob Pannell believes that the prospect of rising interest rates will keep remortgage demand steady and that strong remortgage activity - approvals reached a two year high in February - will keep the mortgage market afloat.
The increase in remortgage approvals also suggests that lenders are particularly keen to attract this type of business. Remortgage applications come from borrowers with a track record of maintaining a mortgage commitment, which potentially makes them a safer bet for lenders.
The CML figures show that, finally, the mortgage market in the UK may be about to start a recovery after several years of problems. The global financial crisis had a significant effect on all UK lenders and the increased desire for remortgage applications and the increase in the number of approvals suggests that, for remortgage borrowers at least, there may be some light at the end of the tunnel.
The CML's figures are some of the most widely used in the industry as they are the largest and most established lenders organization. The data showed that whilst lending in March 2011 was GBP 200 million below the figure twelve months previously, it had risen by over one fifth from February.
News of these new lending statistics has been much appreciated by the many buyers who have been unable to obtain funding for house purchases or remortgages over the past three years. People looking for remortgages have been unable to move to better rates during this time due to the mortgage lenders tightening their criteria.
The past decade saw masses of unsecured debt being secured against properties by using remortgage funding, which was a contributing factor to the mortgage and property market crisis over the past few years. Of course, the financial crisis stretched across many UK sectors, and so many people faced unemployment and were no longer able to keep up with their new higher mortgage repayments.
With fewer remortgages available, increasing numbers of households are struggling to maintain their personal debts. A recent study by the BBC found that personal debt was one of the biggest individual stresses in the UK with the nation owing a collective GBP 1.4 trillion.
Many homeowners who managed to survive the financial crisis are still sitting on high levels of debt, and so it is welcome news that they may now be able to consider a remortgage in order to assist with their monthly expenditure and reduce their outlay on debt repayments.
Although household finances remain stretched thanks to tax rises and higher than expected inflation, the CML are optimistic that the housing market has improved in the last twelve months. The general view of mortgage lenders is that the availability of home loans should increase in the second quarter of 2011 although the increase may not be as positive as some had hoped.
A leading economist from the CML points to the fact that the demand for remortgages in the UK remains steady. Bob Pannell believes that the prospect of rising interest rates will keep remortgage demand steady and that strong remortgage activity - approvals reached a two year high in February - will keep the mortgage market afloat.
The increase in remortgage approvals also suggests that lenders are particularly keen to attract this type of business. Remortgage applications come from borrowers with a track record of maintaining a mortgage commitment, which potentially makes them a safer bet for lenders.
The CML figures show that, finally, the mortgage market in the UK may be about to start a recovery after several years of problems. The global financial crisis had a significant effect on all UK lenders and the increased desire for remortgage applications and the increase in the number of approvals suggests that, for remortgage borrowers at least, there may be some light at the end of the tunnel.
Howard Ogollegos
Howard O'Gollegos writes for Just Commercial Mortgages.com the UK's No.1 site for the latest commercial mortgage rates and commercial property finance news.
View all articles by Howard Ogollegos