Hampshire: Re-mortgaging boom a sign of growing uncertainty

A significant rise in people re-mortgaging to improve their existing homes could hit the new-build property market during 2017, leading mortgage broker Chris Schutrups has warned.

Property experts have been predicting a cooling of the new home market as a result of increased economic uncertainty brought about by a squeeze on expenditure in the public sector and elsewhere.

Chris Schutrups, managing director of Southampton-based The Mortgage Hut Group, said some of the UK’s major housebuilders had been predicting a slowdown in completions during 2017, and that had been further evidenced by an increase in re-mortgage applications as more people sit tight and improve their existing home.

And with record numbers of people in the next few months likely to end up on a standard variable rate mortgage after a fixed rate deal ends, the boom in re-mortgages is likely to continue among home owners looking for a deal.

“The next quarter will see the biggest ever number of people currently on fixed rate deals with their mortgage lender being switched over to the standard variable rate,” said Schutrups. “Lenders are very aware of this situation and are monitoring it very closely because they want to keep their customers.

“Anyone who is looking to make some savings this year or to cut back on their outgoings will be looking at their mortgage very closely - it is usually the biggest expenditure any of us will ever make. And that amount of borrowing means slight changes in interest rates can have a big effect on monthly payments.

“Making a saving of £100 or £150 per month on a re-mortgage is really not that unusual these days - and who wouldn’t like £1,200 or £1,800 a year in their bank account rather than going out on their mortgage.”

The Mortgage Hut, which has its headquarters in Southampton, has more than three times as many customers likely to be looking for new mortgage deals during 2017 than in the previous six years added together.