There has been a growing number of homeowners who are choosing to take out loans in order to remortgage and improve their current home as opposed to moving-house.
Analysing the data shown by UK finance, the current total of borrowers in the UK re-mortgaging market is standing at the highest number seen for an entire decade, as more than 220,000 households were re-mortgaged in 2018.
In the early months of 2019, there was a 10% rise in comparison to the year before, with the average loan taken out totalling at approximately £50,000. Meanwhile, the number of borrowers who took out loans to relocate to a new home seemed to plateau year-on-year, showing no significant changes.
Ray Bougler, a mortgage lender expert, said that “Stamp duty rates have increased to such a level the tax is depressing the numbers who want to move to a bigger home.”
Throughout 2014, there was a noticeable increase in stamp duty tax (SDLT) which made moving to a new house a more expensive affair, especially for those who wished to buy a home that was worth more than £937,500. However, tax offices were still demanding extensive figures even for the more ‘affordable’ dwellings, as a home that was worth only £500,000 could face a £15,000 bill for taxes.
Due to this recent curve in the lending market, the homeowners who are currently considering taking out a loan for remortgaging purposes are likely to get hold of a lower rate in comparison to the figure that they were paying previously.
Mr Boulger stated: ‘Interest rates are so low, borrowers can increase their mortgage by releasing cash from their homes, without increasing their payment.’
The widely expanding impact of the UK’s ongoing political concerns is proving to show face in the housing market, as the mortgage lenders are detecting a recent anomaly in borrower’s intentions. Industry experts eagerly await the outcome of October 31st and predictions of Brexit’s effect on house prices are sparking debates amongst the industry specialists.
Compariqo Finance offers bespoke re-financing solutions to the property sector. Contact one of our advisors if you are considering further finance on your home.