The housing market is uncertain and can be incredibly daunting. Being able to afford a house or moving up the property ladderappears as an impossible task. With such doubt, mortgagelending has increased within the last year. During October 2017, it totalled £23.1 billion. The mortgage industry is being proactive to help potential and current homeowners to get what they want. Remortgaging is potentially helping current home owners save money in the long term.
Of all mortgages approved, remortgaging accounts for 39% and is increasing. Current homeowners are seeking out better deals for themselves and switching mortgage lenders. Competitive rates have been beneficial because homeowners are able to find what is best for them and their current situation. For lenders, this means that they have had to restrategise what they have to offer. They have recognised that the needs of homeowners are changing, therefore they need to adapt.
The increase in property prices has corresponded with the increase in mortgage lending. Homeowners with aspirations of climbing the property ladder are finding it more difficult. As a result, they are choosing to reinvest in their current houses by building extensions or refurbishing. From a money perspective, it works out cheaper to simply change the present home rather than find a new one. Furthermore, there is much more security in today’s climate to stay in the same home and gradually change it. The prospect of buying a new home gives way to a lot of financial stress that may leave buyers worse off.
Total lending has increased by 14% since last year and first-time buyers are part of the strong lending activity. Mortgages are allowing them to buy new properties rather than renting. This is extremely prevalent in London where housing is expensive. Overall, lending here has reached the highest level in a decade.
Mortgage lending has been adapted by buyers and homeowners to maximise the housing market for themselves. In turn, mortgage companies now must constantly adapt with the current market and the profile of homeowners. In such an uncertain time for the public and the lowering house prices still unlikely, they have taken the incentive to adapt.