Consumers borrowed a record amount through their remortgage deals to repay costs piled up around Christmas.
The funds withdrawn in December jumped to £703 million and reached the highest monthly level recorded in a year, according to new figures from LMS. The amount was higher by 40 per cent on the previous month, while compared to December 2013 it was higher by 64 per cent.
The fact that many people are not able to cope with the surge in costs in the festive period is an indication that economic improvements still have little impact on the majority of households.
The West Midlands and the North East were the most affected, with remortgage customers raising loan-to-values by 15 per cent and by 10 per cent within a month, respectively. LTVs in both regions stood at 73 per cent in December.
London had the lowest LTV of 49 per cent and the largest average remortgage value of £247,479.
LMS calculations reveal that towards the end of 2014, consumers were less able to afford a new mortgage. The annual repayment as a proportion of income has declined to 19 per cent in November from 19.2 per cent in October and was down from 20.4 per cent in November 2013.
The average monthly income of a household, according to data of the Council for Mortgage Lenders , fell to £45,375 in November from £45,707 October. Nevertheless, it was higher than the £43,000 earned on average in November 2013.
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