Next quarter is vital for remortgage deals

DAVID FINLAY, MANAGING DIRECTOR FOR MORTGAGES, BARCLAYS
DAVID FINLAY, MANAGING DIRECTOR FOR MORTGAGES, BARCLAYS

Due to a weak economy that may struggle to handle an interest rate rise and high inflation restricting consumer spending, on the surface it remains likely the base rate will continue to be held.

But with global economic problems, particularly from the US, bubbling away it’s prudent to be aware that influences on base rate movement come in many forms.

It’s not only interest rates that have home owners looking over their shoulder as many are feeling the squeeze on household budgets.

Remortgage fence-sitting could be a costly game for those who can act now as even if rates are held there are opportunities for borrowers to benefit.

The remortgage market is performing well. Council of Mortgage Lenders figures showed remortgage lending in July up 11% by volume and value compared with July last year. There were 31,500 loans for remortgage worth £4bn in July, up 1% by volume and 5% by value compared with June.

But the regulator’s data shows remortgage business fell from 38% of new lending in Q1 to 34% in Q2, but remains above the 30% seen in Q2 2010.

Data from Connells Survey and Valuation suggests remortgaging was the only category where activity grew month-on-month in August, rising 11% compared with July and by a staggering 108% compared with August 2010.

The summer months can offer statistical oddities due to the seasonal nature of the market. The next three months are vital for firms with clients in a position to remortgage.