Homeowners borrowed £27.2 billion against housing in the month of October, up on the monthly £25.6 billion average for the three months to September. This took total lending secured against homes to £748 billion, up net £9.5 billion this month.
Commenting on the figures, Ben Thompson director at independent, no-fees mortgage advisers, Clear Cut Mortgages said:
"There are early signs in these data that consumers are getting the remortgage message and that we are starting to see a trend towards consolidation of expensive short-term personal borrowing into mortgage debt. Consumers are beginning to seek ways of lowering interest charges and repayments on outstanding borrowing."
"Secured borrowing remains high and in our experience consumers are willing to borrow heavily against property in the current market, while lenders make money available to them at multiples of salary that are historically high. This trend is spurred by the low-rate environment and the increasing cost of property.
"But there is a point at which over-eager borrowers begin to delude themselves, divorced from the realities of value in the housing market. Should we see this delusion manifest itself, we would be very concerned about long-term prospects for the market."
What consumers should be doing
"Borrowers should be looking for a better deal from their lenders, if they haven't already. One way of doing that is to consolidate existing personal debt by remortgaging. There are still cheap deals to be had on home loans and interest rates can be half those of high-street personal borrowing rates - if not more.
"If consumers are considering making such a move, we would recommend they seek flexible mortgages, meaning they can raise monthly their repayments to get rid of the consolidated personal borrowing - rather than carrying this debt over the full-term of the mortgage, which can be a very expensive option in the longer term.
"For such customers, we would recommend Britannia's 2-year fixed at 4.19% or Nottingham Building Society's 3-year discount at 3.53%.
"Clear Cut's own research shows that by moving to one of the better fixed rate deals on the market, a total of £7.5 billion could be saved from the nation's mortgage repayments every year. Indeed, there are a number of attractive fixed and variable rate mortgages out there, as lenders have spent the past couple of weeks re-pricing these products. All of that together means that there's never been a better time to remortgage."
Anyone considering getting a mortgage can speak to a Clear Cut adviser by calling 08450 614 592 or logging onto www.clearcutmortgages.comhttp://www.clearcutmortgages.com
