Remortgage Loans See Jump In Activity
The mortgage and home owner loan markets in the UK have had an extremely subdued year throughout 2009 and although there has been a significant increase in activity in the number of loans for house purchase over the course of the year, the number of new loans for remortgage purposes has actually continued to decline.
The main reason for this lack of activity is due to the extremely low base rate of interest making lenders standard variable rate loan deals a more attractive option than anything on offer in the remortgage loan market, thereby encouraging borrowers to remain with their existing lender rather than look for a new home owner loan.
But due to a new range of cheaper loan products from various lenders, which also offer higher loan to value ratios, remortgage loans are now becoming a realistic option for many borrowers once again and according to the latest figures from the Conveyancing Alliance the number of remortgage loans increased by almost one third from October to November this year. Although this increase is from an extremely low historic level, Conveyancing Alliance believe that the increased levels of remortgage loan activity are a good sign that recovery is on its way in 2010.
Harpal Singh of Conveyancing Alliance said “We should point out that this is from a low level and that we should not take every month in isolation, however, this is an encouraging sign and is perhaps evidence of a more competitive remortgage market with higher loan to values on offer and better pricing on those products.
For most of 2009, the remortgage market has been a dead duck, however, we suspect it will show continued signs of recovery into next year, particularly picking up in the second half when many borrowers will be coming off deals they signed up to in the second half of 2008 which do not have particularly attractive reversionary rates.”
