Tuesday 18 February 2020 12:52 pm

Remortgages jump as owners invest in home improvement projects

The number of homeowners remortgaging their properties to access additional cash jumped in December, as Brits took advantage of low interest rates to invest in home improvements. 

Remortgages with additional borrowing increased 5.9 per cent at the end of last year as homeowners borrowed money for DIY projects. 

The average additional amount borrowed in the month was £50,702, according to the latest figures from UK Finance.

There was a 0.5 per cent slump in the number of remortgages with no additional borrowing, which fell to 16,490. 

Ben Johnston, director of off-market property app Houso, said: “Many homeowners are choosing to extend or improve what they have rather than move as they take advantage of historically low interest rates for that extra borrowing.”

‘There are more people remortgaging and taking on additional borrowing but this is not yet ringing alarm bells,” Gareth Lewis, commercial director of property lender MT Finance, added.

“Far preferable to do this on a cheap mortgage rather than an expensive credit card. It is also a sign of the times with homeowners raising money for home improvements and extensions rather than paying the high cost of moving.”

There were 29,400 homemover mortgages completed in December last year, a jump of 3.2 per cent compared to 2018, demonstrating the “resilience” of the housing market.

Meanwhile, the number of new first-time buyer mortgages completed in the month rose 0.3 per cent year-on-year. 

Former Rics residential chairman Jeremy Leaf added: “Trends in mortgage lending are always a useful indicator of future market direction.

“However, these figures reflect what was happening in the months leading up to the election so only show a more solid resilience in activity in what was still quite a turbulent period.”