Remortgaging for Christmas?

Housing stock

Some homeowners are remortagaging to help cover the cost of Christmas, a property services company has claimed.

In its latest mortgage report, LMS says that gross remortgaging lending has reached record levels this year, hitting £4.22 billion in November - 24 percent higher than a year ago.

%VIRTUAL-SkimlinksPromo%"Remortgage lending is up by nearly 30 percent compared to this time last year, and remortgage customers are releasing more than £8,000 more cash than they were in January," says LMS chief executive Andy Knee.

"According to a recent LMS survey approximately 18 percent of the £21,579 average equity released last month will go into home improvements, 11 percent on the repayment of debt and the remaining 71 percent will finance extra spending, most probably ahead of Christmas."

The company compiled the data from its own records - it handles over 28 percent of all remortgage transactions in the UK - and says that the average amount being taken out by homeowners is £21,579 - over £8,000 more than the average amount in January.

As many homeowners discovered to their cost in the 1980s, increasing a mortgage is risky, as it leaves them at risk of falling into negative equity if house prices fall. Even now, according to the Financial Conduct Authority (FCA), many people are living on homes worth less than their mortgage - between 160,000 and 630,000, according to different estimates.

"For those holding a mortgage, price falls can leave homeowners with little or negative equity in their homes," says the FCA. "This can leave borrowers with unsustainable burdens of debt, unable to move and restricted in their options to remortgage on to better rates."

According to the government's Money Advice Service, more than a third of adults say this Christmas will be harder for them to afford than last year. Over 40 percent say they're cutting back on other costs to help fund it, but more than a quarter say they get carried away and spend more than they can afford.

As a result, 32 percent of adults plan to cover the cost of Christmas on credit, and 1.2 million people say they'll turn to payday loans.

"Christmas is an exciting time to catch up with family and friends but can also be a worry financially, and very stressful if money is tight. Getting to grips with the costs in advance of the big day will help you take control of your spending and alleviate some of the pressure," says MAS head of service delivery Jane Symonds.

"If you're working on a tight budget, our Cutback Calculator will show you how to free up some spare cash for Christmas. We also have lots of impartial advice to ease seasonal spending concerns - from how to set a saving goal to why it's vital to review your borrowing options before taking on any extra debt."

House photos guaranteed to put buyers off
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Remortgaging for Christmas?

We're not quite sure that the bear adds anything to this listing, maybe it's meant to avert your attention from the dreary decor?

The seller is obviously a horror film fan. However, it might be an idea to remove all murder evidence before putting your house on the market, even if it is fake!

Does the doll come free with the house? We hope not. It's a little creepy...

This real estate agent probably should have waited until the car was moved. 

Much like the bear in the tub, this is another bizarre bathroom addition. 

If you're going to take pictures with others around,   at least crop them out. It might also be an idea to put a shirt on too...

We don't want to know what the couple are up to in this photo.

Every good house needs a pool, just without the additional flotsam

One fail-safe way to generate interest is to get some pretty girls involved. This seller obviously has their head screwed on.

Estate agents tell us that a house should always be clean and presentable when people come to view. The advice obviously fell on deaf ears here.

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