Remortgaging activity rose to 21% of the valuations market in March, increasing from 15% in March 2016, according to the latest research from Connells Survey & Valuation.
As the inflation rate hits its highest level since September 2013 , homeowners have sought to off-set the rising cost of living. The growth in remortgaging has been driven by those eager to save money by slashing their monthly mortgage repayments.
As a proportion of market activity, remortgaging has hit its highest level in March for five years.
John Bagshaw, corporate services director of Connells Survey & Valuation, said:
“Remortgaging rallied in March. As the cost of living rose, consumers started to hunt ways to reduce outgoings. Food prices have been increasing at their fastest pace in three years while fuel prices have jumped 18 per cent annually . Faced with a spike in bills, homeowners have been forced to become more frugal.
“For those struggling, remortgaging can offer tangible financial relief. With the low-base rate and property values increasing 6.2 per cent annually , many are seizing the opportunity to save through remortgaging at a lower loan-to-value ratio. This trend is supported by the latest CML figures which show a 22% rise in the value of remortgage activity . If the price rises continue and household bills balloon, we could see an ever greater number of homeowners turning to remortgaging to cut costs.”
“Buy-to-let remortgage valuations have also seen a slight uptick. While buy-to-let valuations are at half the typical average for March, those who have decided to stick it out in the sector are trying to recoup the loss of mortgage tax relief. 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.”
“We’ve observed a slight slowdown in the first-time buyer segment, with March seeing activity return to the five year average. After the exceptional increases seen January and February, the market 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 homeowners particularly hard. Many are finding it difficult to tuck away spare income and save for a deposit.”