The housing market continues to go from strength to strength with a 57 per cent increase in mortgages taken out for house purchases and 51 per cent increase in remortgaging in January compared with the same month last year, according to the British Bankers’ Association.
This jump in lending is partly due to Government initiatives plus the rise in number of high loan-to-value products available outside the Help to Buy scheme. This is making it easier for first-time buyers to get on the housing ladder, while rising property values are enabling homeowners to remortgage and buy their next property.
Remortgaging is growing in popularity as the Funding for Lending money has enabled lenders to offer some of the lowest ever five-year fixed rates. Borrowers sitting on high standard variable rates have locked into lenders with more competitive pricing. More borrowers are overpaying on their mortgages, taking advantage of ultra-low interest rates in order to improve their equity stake before a possible interest rate rise next year.
The Mortgage Market Review will be introduced at the end of April and we expect lenders to further tighten up their criteria in response. Lenders are already looking at how borrowers manage their finances, which will affect how much they will lend you. It will also have an impact on the rate you pay: if you are a good risk and have a sizeable deposit then the most competitive rates will be available to you. If not, you may have to pay a higher rate.
Anderson Harris is happy to advise on the best way to get personal financial circumstances in order. Please get in touch.