A remortgaging boom is on the horizon in 2022, according to UK Finance data. Figures suggest a busy time ahead for the market, with lending expected to reach £69bn during the year (up 11% on 2021) and accelerating further still to £93bn in 2023. There are a number of factors driving the rise, explains Hina Bhudia, a Partner here at Knight Frank Finance.
The most obvious is the impact Covid has had on household income.
“Incomes have been impacted as a result of Covid, so I think a number of people could be sticking with their existing bank and taking a new rate,” says Hina.
“Moving home right now can be difficult because you have to go through all of your financials again with a new bank. When someone remortgages, however, there are two things they can do. They can remortgage with a different bank, or they can opt for a product transfer with their current lender, without the need of going through any assessments on their income.”
Another driving factor could be constrained supply, with fewer homes coming on the market. House price growth, which was up 10.4% in December 2021 for the year, according to Nationwide’s latest House Price Index, could also be an issue.
“House prices have gone up so much that people are not getting what they want for their money, so it’s better for them to remortgage, take equity out of their home and make home improvements to their existing property.”
Despite the Bank of England’s decision to raise the base rate to 0.50% in February, this is so far having a minimal impact on the market with rates still at an all-time low, which could also be another driving factor, says Hina.
Although, she points out that these competitive rates are also available on a wide range of mortgage products.
Regardless of your reasons for remortgaging, Hina says homeowners should always test the market to make sure they have the best deal out there.
“Just in the same way you would assess your car insurance or utility bills, it’s so important that people are speaking with an advisor to make sure they’ve got the best deal in the market, even if they’re currently in a fixed rate for two or five years.”
If you are looking to remortgage this year and would like to discuss your options, get in touch with our expert remortgaging team who would be happy to help. We have access to over 200 lenders, and can help find the most suitable and cost-effective mortgage for you.