Re-mortgage boom funds Christmas spending

Homeowners are using the equity in their homes to find spare cash for Christmas as remortgage deals reach record levels.

According to a report from property service company LMS, gross remortgage lending has jumped 24% as owners use their homes to fund their festive splurge.

Gross remortgage lending increased by £18m in November to £4.22bn, showing an increase of nearly a quarter on last year’s figures.

Chief Executive of LMS Andy Knee said;

“Those remortgaging are each taking out an average £26,400 in extra equity, which will most likely be used to fund a festive spending spree.”

The increase may be partly due to the fact that mortgage lending has become cheaper and more affordable as the market received a boost from the Government’s Help to Buy scheme.

The LMS survey shows homeowners taking advantage of the deals on offer and showed that more than a third of customers were able to reduce monthly repayments by about £500.

The market for remortgaging has grown strongly in the last year and now represents a quarter of the total gross mortgage market of £17bn according to the Council of Mortgage Lenders (CML). 

The report comes a few weeks after the CML played down the risk of a housing bubble, claiming that an unbridled housing boom was “unlikely”, despite forecasts for mortgage lending to growing by 15% to £195bn, the highest level since 2008.

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