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Britons are borrowing more against their homes
June 20th, 2007
Remortgaging jumps sharply in May, says Moneyextra
Despite four base rate rises since last August and the prospect of at least one more to come, Britons are borrowing more against their homes. The average remortgage is now £122,5411, up 7.19% on year ago levels.
The increase reflects past rises in house prices as people now look to re-fix after their initial introductory rate mortgage ends; but it is also a sign that many may be using equity in their house to deal with other debts.
Robin Amlôt, Senior Editor of Moneyextra.com, said, “Recent reports from the retail sector, including disappointing sales growth figures from both Tesco and Sainsbury, would suggest that we’re not spending this money on goods and services but using it to reduce other debts.
"It seems many people are opting to switch expensive credit card debt and overdrafts into long term low interest rate mortgage debt. Of course, this does mean they could be paying far more interest in the long run but it is one way of reducing immediate monthly outgoings."
In the broader housing market pressure is still focussed on first time buyers. The average value of property being sought by first time buyers rose by 8.91% to £183,317 while the average first time buyer mortgage rose by just 2.99% to £139,935.
Over the same period, overall average property prices rose by 6.05% with the average house price at £228,754 and the average mortgage rose to £139,095, up just 2.95%.
The average value of mortgages actually completed by AWD Moneyextra customers in May jumped sharply, up £18,884.08, to £166,732.43, its highest level ever. The most popular mortgage lender in May was Abbey2.
For further information, please contact:
Robin Amlôt
Senior Editor, Moneyextra
Tel: 0870 191 5626
public.relations@moneyextra.com
NOTES TO EDITORS
Moneyextra.com's Compare and Buy Tool Searches May 2007
| Mortgages | FTB | Moving | Remortgage | All |
|---|---|---|---|---|
| Average Borrowed | £139,935.00 | £170,770.00 | £122,541.00 | £139,095.00 |
| Average LTV | 76.33% | 61.34% | 50.27% | 60.81% |
| Average Property Value | £183,317.00 | £278,420.00 | £243,754.00 | £228,754.00 |
| Average First Income | £40,213.00 | £47,270.00 | £44,459.00 | £44,527.00 |
| Average Second Income | £20,947.00 | £22,630.00 | £20,392.00 | £21,187.00 |
| % with dual incomes | 33.99% | 57.07% | 55.27% | 47.39% |
1 Figures are based on the first 50,000 searches carried out on Moneyextra.com's Mortgage Comparison tool each month.
2 Moneyextra.com's top mortgage lenders
| May 2007 | Jan-May 2007 |
|---|---|
| 1. Abbey | 1. Nationwide BS |
| 2. Nationwide BS | 2. Woolwich |
| 3. Woolwich | 3. Cheltenham & Gloucester |
| 4. Halifax | 4. Abbey |
| 5. Cheltenham & Gloucester | 5. Halifax |
| 6. Alliance & Leicester | 6. Northern Rock |
| 7. Northern Rock | 7. Alliance & Leicester |
| 8. Cheshire BS | 8. Coventry BS |
| 9. Bank of Ireland | 9. Mortgage Trust |
| 10. Advantage Mortgage Services | 10. Cheshire BS |
| 11. Skipton BS | |
| 12. The Mortgage Works |
Moneyextra.com regularly wins awards - in 2007
- Finalist Customer Focus, National Business Awards Wales/West Country Region
- Finalist Growth Strategy, National Business Awards Wales/West Country Region