Remortgaging activity increased strongly in the UK in March

Remortgaging activity in the UK increased in March, up to 21% of the valuations market from 15% in the same month in 2016 and buy to let remortgaging also rose, the latest data shows.

More landlords sought a remortgage with valuations in this sector up 3%, according to the figures from Connells Survey and Valuation with the firm suggesting they may be searching for additional fund due to tax changes.

However, first time buyer valuations decreased after a more active February than usual amid speculation that rising inflation may be having an impact on those seeking to get on the housing ladder.

The report suggests that as the inflation rate hits its highest level since September 2013, home owners have sought to off-set the rising cost of living and the growth in remortgaging has been driven by those eager to save money by cutting their monthly mortgage repayments.

Indeed, as a proportion of market activity, remortgaging has hit its highest level in March for five years.

‘For those struggling, remortgaging can offer tangible financial relief. With the low base rate and property values increasing 6.2% annually, many are seizing the opportunity to save through remortgaging at a lower loan to value ratio,’ said John Bagshaw, corporate services director of Connells Survey & Valuation.

He pointed out that this trend is supported by the latest figures from the Council of Mortgage Lenders which show a 22% rise in the value of remortgage activity and Bagshaw predicts that if the current financial outlook continues there could be an ever greater number of home owners turning to remortgaging to cut costs.

He also believes that buy to let landlords are trying to recoup the loss of mortgage tax relief which is now being phased out over the next few years. ‘With market rents not yet rising, one of the few alternatives has been to remortgage. More landlords have taken this path in March, given the lower cost of borrowing and higher property values,’ he said.
He also explained that after the exceptional increases seen in January and February in first time buyer valuations, this market sector appears to be returning to equilibrium and the winter upswing in first time buyers now looks to have been a short term bounce.

‘Rising inflation will have hit aspiring home owners particularly hard. Many are finding it difficult to find spare income and save for a deposit,’ he added.