Remortgage to release equity before the opportunity goes as Down valuations increase
House prices have generally remained resilient even through the last deep recession, however recently there appears to be a number of Commentators hanging their hats on a Brexit slump in property values.
The Evening Standard 2/9/17 carried the headline “House prices in London hit by Brexit slump as third of homes see fall in value”. In the detail…“More than a third of homes for sale in London have had their asking prices slashed as the suburbs bear the brunt of a post-Brexit property crunch…a total of 36.6 per cent of homes for sale in London had their asking price reduced in the last five months, according to property website Zoopla. The average discounted property is on the market for £52,457 less than it was priced at in March — a drop of 7.2 per cent.”
Remortgages are affected by property values
At Niche Advice we have seen a recent toughing in the surveyors’ stance when assessing property in the region in relation to mortgages too. As lending is based on the lender’s valuation the amount that can be advanced directly relates to the value put on the property.
For example, if you believe your property is worth £450,000 and you are looking to secure a mortgage of £308,750, on a mortgage product up to 65% of the value; if the surveyor values the property at £435,000 only £282,750 (65% of their value) will be lent. A shortfall of £26,000 on what you wanted! If you have earmarked the remortgage for a specific purpose then that is likely to put a dent in your plans.
Common reasons for Remortgages
Niche Advice arranges remortgages for a number of purposes but the most common ones are listed below:
- Better or fixed interest rate
- Home improvements
- Debt consolidation
- Remove someone from the title deeds e.g. divorce, separation or for tax purposes
Niche Advice offers appropriate advice on remortgages from the whole of the market. To find out how we can save you money and/or help you raise capital please complete the Contact Form on this website or call T: 020 7993 2044
Author: Payam Azadi
Payam Azadi is a partner at Niche Advice who are whole of the market Independent Mortgage Brokers. His role is very much focused on Property financing both on residential and commercial lines.