In
the latest, and most recently published, set of UK mortgage data (for the month
of November 2019) 18,470 pound-for-pound re-mortgages were made (i.e. the
borrower went from one rate to another with no additional borrowing).
However,
since the 1970’s, the British have seen their homes as cash cows and cash
machines, with many homeowners re-mortgaging at the end of their mortgage’s introductory
term (usually after the initial two, three or five years) to avoid being passed
on to their mortgage lender’s more expensive standard variable rate.
For
some borrowers re-mortgaging allows them an opportunity of raising additional cash
whilst for others it enables them to follow interests and activities; such as big
holidays, home improvements, new cars, debt consolidation or financially
helping family members (e.g. paying off credit cards or helping with house deposits).
Interestingly, in November 2019 alone (the most recent figures) an eye watering £957,856,700 was borrowed on top of existing mortgages by 18,610 UK homeowners re-mortgaging and borrowing, on average, an additional £51,470. Therefore, one has to ask, are we borrowing too much? Looking at these numbers, one might think we are over-extending ourselves, yet as regular readers of my blog about the Warrington property market will know – I like to drill down and look at the historical figures. Back in 2006, just before the crash, British homeowners were actually borrowing in excess of £5bn per month over and above the re-mortgage amount – much more than the £1bn we experienced in November!
Looking at statistics from the Bank of England for the UK as a
whole, even with the data mentioned above, British property owners have increased
the equity in their homes by just over £270 billion since 2010 compared with a
£275 billion withdrawal during the 2000s. This reveals that the last decade (the
2010’s) is the first since records began in which Brits have increased their
equity. This is partly due to the fact that the number of housing transactions crumpled
during the Credit Crunch, and many homeowners chose to reduce their mortgages, rather
than continually increasing them - even if their property started going up in
value after 2013.
Warrington homeowners
have nearly three billion pounds into their Warrington properties over the last
six years; overturning a trend stretching back to the 1970s.
Considering the exact figures, it can be seen whilst the total
value of mortgages has increased slightly since 2014, as a percentage this has
gone down, meaning Warrington homeowners and Warrington landlords have
increased their equity since 2014 by £2,885,353,900 (one might call it a windfall?).
It can quite clearly be seen that the
financial insecurity sparked by the Credit Crunch crisis has created a
generation of Warrington homeowners/landlords who are savers and improvers
rather than movers and excessive borrowers, using excess cash to invest in
their property and pay down debt or to excessively borrow on their
equity growth, as can be seen on the graphs and table.
If you are looking for an agent that is well established, professional and communicative, whether you’re buying, selling or looking for an investment opportunity, then contact us to find out how we can get the best out of the Warrington property market.
Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.
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