Boom in remortgaging as homeowners stay put

INCREASING numbers of homeowners are choosing to release cash from their properties to carry out improvements rather than move house.

The number of borrowers remortgaging is at its highest level in more than a decade, say lenders.

More than 220,000 households remortgaged last year, according to trade body UK Finance. In February alone, there was a 10 per cent rise compared to the previous year, with the average amount withdrawn around £50,000. But the number of borrowers taking loans to move home remained flat year-on-year. Mortgage expert Ray Boulger, of John Charcol, said: ‘Stamp duty rates have increased to such a level the tax is depressing the numbers who want to move to a bigger home.’

Stamp duty was put up in 2014, increasing the cost of moving for anyone buying a house worth more than £937,500. Even those buying properties worth £500,000 face a £15,000 tax bill. According to a study, homeowners who improved their property in the past five years have added £40,000 to its value. Borrowers remortgaging are also likely to secure a lower rate than they were paying previously.

Mr Boulger said: ‘Interest rates are so low, borrowers can increase their mortgage by releasing cash from their homes, without increasing their payment.’