In recent months, despite all the Brexit uncertainty and ongoing market trends for slowed and reduced growth and progress in the property and mortgage markets, secured loans are showing strong signs of a boom. Remortgages, second mortgages and other secured lines of finance are all bucking the current trends and feeding in the longer-term trend with remortgages in particular, growing year on year.
Remortgaging and taking out second mortgages are popular routes for home and property owners in the UK to unlock potential equity and capital without having to sell the properties in question. This has meant that with the recent slowdowns in property sales and transaction, increasing numbers of people are using their most valuable assets for finance for a range of purposes including home improvements (more information), debt consolidation and more.
In the first quarter (Q1) of 2019 alone, there were 6,500 new second mortgages taken out, an astonishing 25% increase on 2018 in terms of new business deals. With regards to the remortgage market in the UK, there were more than 53,500 remortgages in the UK in May of this year alone, up from over 52,000 in April. The average remortgage amount is up too, from £171,622 in April to £172,000 in May, meaning this market is also increasing month on month and year on year.
Why Are Remortgages and Second Mortgages So Popular?
There are a number of reasons for the continued increase in remortgaging and second mortgages in the UK in current months and years. One of the primary reasons is that with a general lack of properties on the market, for those looking to move property, there is a real sparsity in the UK market. Therefore, many homeowners are using remortgages and second mortgages as a way in which to invest in their own properties to increase their value for when the market becomes more dynamic once again.
With Planning Permission rules being relaxed in recent months across the UK too, there is more scope than ever for property owners to improve and renovate their properties, with more than ever being classified as Permitted Developments (read more).
With regards to remortgages, deals for these products are becoming increasingly competitive and attractive. Thus, more homeowners than ever are turning to cheap and desirable remortgages to get the best mortgage deal on their property, rather than look to immediately sell up and take on a new mortgage that may well be more expensive.
Many people in these uncertain financial times are also seeking to take more control of their finances and financial situations. Therefore, using finance from second mortgages or remortgaging to consolidate and pay off existing debts is an increasingly popular and effective way by which to do so.
And, with interest rates in the UK on mortgages and elsewhere at near record-lows, many home and property owners see this as the ideal opportunity to remortgage and even fix interest rates at current levels for a number of years. This again, is proving very helpful for people seeking to give themselves and their families an added degree of surety for the coming months and years.
Moreover, brokers in the mortgage and remortgage market are proving to be a crucial element of the industry and a vital cog in the market, as they enable borrowers and property owners to get the access to finance that they need and want, in a way high street banks and lenders simply will not accommodate.