Mortgages: The year of the remortgage

Tuesday, 18 December, 2007

The cloud overshadowing the property market seems to get darker by the day but there is a silver lining for brokers next year – the remortgage market. Activity in this sector is set for a substantial boost but those wishing to take advantage need to brush up on managing their existing client base.

According to the Council of Mortgage Lenders, in 2005 and 2006 some 61% and 65% respectively of all mortgages were signed up at fixed rates, predominantly two- and three-year deals. This represents some 1.322 million mortgages in 2005 and 1.466 million mortgages in 2006.

Even if no-one moved house at all and there were no new first time buyers, there would still be well over a million and possibly as many as two million or more homebuyers looking for a new remortgage deal.

And, of course, the market for homebuyers won’t dry up entirely. Mortgages for house purchase have been running at over a million a year since 1997, peaking at 1,397,000 in 2002 and declining gradually to 1,126,000 last year.

Even in the depths of the worst property recession in years, when property prices fell 20% and the mortgage rate rocketed to 15.4%, the number of loans for house purchase was 783,000 in 1990, bottoming out at 722,000 in 1991.

Source: http://www.citywire.co.uk/News/