Homeowners rush to take out cheaper mortgages

CHEAP home loan deals have driven a surge in homeowners taking out new mortgages on their property.

The number of remortgaging loans in London rose to an eightyear high of £4.2 billion and there was also a dramatic jump in Scotland, Wales and Northern Ireland, according to the Council of Mortgage Lenders.

Experts have said the high costs of moving means many households are borrowing to extend their existing homes or to fund other improvements.

In the first three months of the year, loans for remortgaging in England totalled £16.7 billion, up 18 per cent on the same time last year. This equated to 92,300 loans, up 17 per cent.

But lending on house purchases fell. Across England, buyers took out 132,000 loans in the first quarter, down 13 per cent on last year. They borrowed £25.5 billion, down 8 per cent.

Separate figures from HM Revenue & Customs on Tuesday revealed property sales dropped almost a quarter between March and April.

Yorkshire Building Society last month launched a record-low 0.89 per cent mortgage deal, triggering a price war.