Figures released by Hampton Mortgages show that the average property values had grown by 12 per cent year on year in December 2006, and at the same time figures from CML show that year on year remortgage values have also increased by 7.09 per cent.
This goes a long way to indicate that the remortgage market is going from strength to strength alongside the residential mortgage market, and more and more consumers are choosing to release equity from their homes to ease the financial strain in other areas of their life.
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This trend, coupled with high street names such as Marks and Spencer and Sainsbury’s announcing strong trading levels in the run up to Christmas, makes for a very lucrative remortgaging market.
Jonathan Cornell, technical director at Hamptons Mortgages said: Consumers are cashing in on the continued strong growth in property prices and taking the equity out of their homes to spend on the high street or on home improvements or more property. This is happening on a sustainable level, and for most consumers remortgaging is better value than other forms of finance such as credit or store cards and bank loans.
On a cautionary note, if there are further increases in the base rate those consumers on variable or tracker deals could see their repayments increase, causing serious affordability problems.
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