The typical value of a property being remortgaged reached £310,646 in July, according to Mortgage Advice Bureau (MAB).
Remortgaged property prices surpassed £300,000 in May 2014 (£306,128) for the first time since January 2009, when MAB’s national mortgage index first began tracking this data.
Average remortgaged property prices climbed 18 per cent in the year to July, compared to a 10 per cent increase in average purchase price over the same period, MAB says.
The faster rise in the value of homes being remortgaged suggests those with more valuable homes are returning to the market and looking to improve on their existing deal before interest rates rise.
Houseowners armed with 30 per cent more equity
Since July 2013, the average remortgage loan-to-value ratio (LTV) has fallen from 58.5 per cent to 54.3 per cent: a decrease of 4.2 percentage points.
This means homeowners are remortgaging with a significantly higher proportion of equity behind them.
Current homeowners put forward 30 per cent more equity in July in comparison to last year (£141,984 versus £109,600 in July 2013), leaving remortgagers in a much better position to access good mortgage rates.
The primary salary of remortgage applicants in July was £46,900, up by 7 per cent year-on-year from £43,785.
Brian Murphy, head of lending at Mortgage Advice Bureau, comments:
“The resurgence of remortgage activity in July has been long-awaited, having lagged behind purchase applications since the start of the year.
“Improved property prices and a boost in housing equity mean current homeowners are in an ideal position to seek a better deal on their mortgage and are prompting the return of wealthier homeowners to the market.”
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