Remortgage Deals Are Making a Slow But Sustained Recovery In The UK Housing Market

Over the past few years, consumers have found it almost impossible to remortgage their homes due to the economic climate. But there has been some great news of late that shows a change. It has been reported by the Council of Mortgage Lenders that mortgage lending is back on the increase.

The CML's figures show that lending was rose by 20 per cent from February to March 2011 and now stands at 11.3 billion. Whilst the figures are 200 million below the lending just one year ago, the increase in the number of mortgages being taken is an encouraging trend for the UK's struggling mortgage market.

The CML figures will provide a fillip to borrowers looking to remortgage as the number of approvals is at its highest level since 2009. Borrowers have been faced with a frustrating remortgage market over the last couple of years with lenders increasingly restricting their criteria and offering less and less attractive remortgage deals.

The past decade saw masses of unsecured debt being secured against properties by using remortgage funding, which was a contributing factor to the mortgage and property market crisis over the past few years. Of course, the financial crisis stretched across many UK sectors, and so many people faced unemployment and were no longer able to keep up with their new higher mortgage repayments.

The financial crisis within the UK also saw banks, building societies and other lenders becoming more brutal in their attempts to recover debts from homeowners. You may recall that we saw record numbers of repossessions over the past few years, and this was all linked in with the high levels of debt that UK homeowners had against their properties. When property prices dropped, many had negative equity so could not sell their properties.

Many homeowners who managed to survive the financial crisis are still sitting on high levels of debt, and so it is welcome news that they may now be able to consider a remortgage in order to assist with their monthly expenditure and reduce their outlay on debt repayments.

A spokesman from the Council of Mortgage Lenders commented that he is aware that the finances of many homeowners are still very much stretched, and he feels that if people are not careful with the slackening of the lenders' approval rates, we could end up back where we started.

The spokesperson did also say however, that it looks as though the mortgage and remortgage markets look stable and set to continue to increase. Of course, this will not continue unless consumers are far more sensible with credit than in previous years.

The increase in remortgage approvals also suggests that lenders are particularly keen to attract this type of business. Remortgage applications come from borrowers with a track record of maintaining a mortgage commitment, which potentially makes them a safer bet for lenders.

The CML figures show that, finally, the mortgage market in the UK may be about to start a recovery after several years of problems. The global financial crisis had a significant effect on all UK lenders and the increased desire for remortgage applications and the increase in the number of approvals suggests that, for remortgage borrowers at least, there may be some light at the end of the tunnel.

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