According to data
from LMS, the number of re-mortgages hit 36,195 in August which is up 8% from
July and up 45% annually. This suggests
the homeowners are looking to capitalise on record low interest rates in the
wake of the base rate cut and meant that re-mortgage activity reached its
highest level in more than seven years, since July 2009.
The value of
gross re-mortgage lending fell by 2% from £6.0bn in July to £5.9bn in August,
as homeowners’ average re-mortgage loan amount dropped by 6% between July and
August from £172,184 to £162,268.
LMS data confirms
that the average re-mortgage loan-to-value (LTV) fell from 58% in July to 54%
in August: the same value registered in August 2015. The dip in LTV, coupled
with the fall in the average loan amount, suggests that homeowners are
exercising a degree of caution accessing ever-cheaper deals by reducing the
proportion of borrowing against the value of their homes.
Those who
re-mortgaged in August 2016 released £31,589, which is 11% less than was the
case in August 2015, when the average amount released stood at £35,590
Re-mortgaging should not be the sole preserve of either owner-occupiers or buy-to-let landlords. All property owners should take advantage of the low interest rates. In an article to be published next week, The Oxford Property Blog looks at the benefit of investing in Oxford's student property market. Releasing equity to re-invest in the student market could help optimise yields and better balance a portfolio.
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