Remortgaging boom is a sign of uncertainty
A RISE in people remortgaging to improve their existing homes could hit the new-build property market during 2017, mortgage broker Chris Schutrups has warned.
Property experts have been predicting a cooling of the new home market as a result of increased economic uncertainty brought about by a squeeze on expenditure in the public sector and elsewhere.
Mr Schutrups, managing director of The Mortgage Hut Group, which includes Mortgage Advice Bureau in Fareham, said some of the UK’s major house builders had been predicting a slow down in completions during 2017, and that had been further evidenced by an increase in remortgage applications as more people sit tight and improve their existing home.
And with record numbers of people in the next few months likely to end up on a standard variable rate mortgage after a fixed rate deal ends, the boom in remortgages is likely to continue among home owners looking for a deal.
Mr Schutrups said: ‘The next quarter will see the biggest ever number of people currently on fixed rate deals with their mortgage lender being switched over to the standard variable rate. Lenders are very aware of this situation and are monitoring it very closely because they want to keep their customers.
‘Anyone who is looking to make some savings this year or to cut back on their outgoings will be looking at their mortgage very closely - it is usually the biggest expenditure any of us will ever make. And that amount of borrowing means slight changes in interest rates can have a big effect on monthly payments.
‘Making a saving of £100 or £150 per month on a re-mortgage is really not that unusual these days - and who wouldn’t like £1,200 or £1,800 a year in their bank account rather than going out on their mortgage.’