Hard times sparking a remortgage scramble

The number of home-owners remortgaging their properties jumped up towards precoronavirus pandemic levels at the end of last year, according to new figures which have just been released.

The Bank of England said 28.1% of mortgages handed out in the fourth quarter of 2021 were remortgage loans – which is a 9.7% increase compared with the same period in 2020.

Finance and housing marker experts say the figures reflect home owners making preparation for hard financial times ahead as inflation rises following the pandemic.

Sarah Coles, who is the senior personal finance analyst at Hargreaves Lansdown, said: "We saw a remortgage renaissance at the end of last year, as property owners took the chance to lock in a cheap deal before higher rates took hold.

"During the last three months of 2021, property owners began to realise that the era of cheap mortgages deals was coming to an end, so it was the time to get a new fixed-rate deal while they were still around."

She added: "Despite the recent rises, mortgage rates are still incredibly low."

Karen Noye, who is a mortgage expert at wealth managers Quilter, said: "Throughout 2022, we are likely to see mortgage lending drop as more people are priced out of the market by the rising cost of living and being put off by the current economic uncertainty.

"First-time buyers who were already struggling to take their first step on the property ladder will likely find it harder still as any deposit saved for a house will be continually eroded by inflation which will reduce their spending power."