The amount of equity withdrawn from homes through remortgaging reached a 9-year high of £837m in December, research from the LMS has revealed.
Last time this much equity was taken out was in 2006 when cash withdrawals reached £1.4bn.
Such has been the market’s growth that December’s figure of £837m was almost a third (32%) higher than December 2014’s £635m despite decreasing by 24% from £1.1bn in November.
The average amount of equity withdrawn per customer from remortgaging fell from a record high of £36,894 in November 2015 to £30,361 in December 2015.
Andy Knee, chief executive of LMS, said: “Remortgaging activity slowed at the end of the year after a noticeable autumn rush. However, year-on-year figures show the market remains buoyant, with a marked difference from the year before.
“Rising housing equity and low rates means borrowers are able to withdraw large sums of equity to support Christmas expenses and buy presents for friends and family without dramatically increasing the cost of their loans.
“It’s been a rocky start to the year as volatile financial markets, limited economic growth in the UK and a weaker pound take their toll. However, global instability is unlikely to have a significant impact on house prices, and housing equity is set to hit record levels. Mark Carney has also ruled out the likelihood of an interest rate rise until 2017, welcome news to many borrowers.
“It’s therefore understandable why people may not think it necessary to remortgage right now. However, as the New Year begins we urge homeowners to take stock of their finances to avoid being caught out when rates do start to rise.”