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Homeowners push to remortgage ahead of rate rise

Homeowners have been actively trying to arrange a remortgage for their homes ahead of a future interest rate rise.
Homeowners push to remortgage ahead of rate rise

 

The Mortgage Advice Bureau (MAB) said there had been a surge in remortgaging activity during the month of July, following a relatively subdued summer.

 

Remortgage applications were up 21% on June, it said, as uncertainty continued over when the Bank of England would act on interest rates.

 

“The resurgence of remortgage activity in July has been long-awaited, having lagged purchase applications since the start of the year,” said Brian Murphy, head of lending at the Mortgage Advice Bureau.

 

“Improved property prices and a boost in housing equity mean homeowners are in an ideal position to seek a better deal on their mortgage.”

 

However, home purchase mortgage applications fell, as house prices reached a new high in June.

 

The Office for National Statistics showed that house prices increased by 10.2% in the year to 2014. The average price in England reached £276,000, while the average in London came within touching distance of £500,000.

 

First-time buyers endured the highest level of growth. The average price paid by first-time buyers completing in June went over £200,000, following an annual rise of 12%.

 

Campbell Robb, chief executive of the housing charity Shelter, said the conditions had become too difficult for those currently living in rented accommodation and called for swifter measures to improve the situation for renters.

 

"From a new generation of part-rent part-buy homes, to encouraging smaller builders back into the market, there are ways to fix this country's housing crisis,” he said.

 

“If we don't see radical action soon, more and more people will be left without a hope of ever building a stable future in a home of their own.”

 

The latest minutes from the Bank of England’s Monetary Policy Committee showed that two of the nine members voted to raise interest rates in August, as the pressure grows to cool a burgeoning economy.

 

Martin Weale and Ian McCafferty voted for a 0.25% rise to the base rate, marking the first time in three years that the vote has not been unanimous in favour of holding rates at their current record low of 0.5%.

 

Keith McDonald

Which4U Editor

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