Remortgaging troubles 'hits middle classes hard'

16/04/2009

Britain's middle classes are facing a harsher financial reality as they can no longer resort to the "security blanket" of remortgaging in times of trouble.

This is the main finding of new analysis from the Homeowners Advice Centre, which also noted the major changes that had been occurring in the mortgage market over recent months.

Prior to the onset of the credit crunch in 2007, rising house prices meant that many homeowners - especially those living in higher-value properties - could remortgage in order to generate extra income.

However, the sharp cutbacks in mortgage provision that has come with the crisis - with the Bank of England seeing loan approvals numbers dropping by half in a year - has shut off this revenue stream.

This leaves many remortgagers more financially exposed than before - as well as not being able take out more loans, they are left with the debt burden of previous loans to pay off.

Chris Jenkins, co-owner of the Homeowners Advice Centre, said: "The middle classes are struggling in the current financial climate and property market… middle-class homeowners still have a mortgage to pay and no amount of equity will put money in the bank."

He added: "With white collar jobs also under threat, the traditional middle class security blanket of a remortgage to consolidate finances has been removed due to a lack of suitable mortgage products for people to refinance into."

Tags; Housing Debt and Bills, Young Family Finances,

• Share
• 
• 
• Store
• 
• Follow
•