Mortgages and Remortgages: Hope on the Frontline of the Property Market

The property market is embarking upon a critical period in its recovery at a time where the economy has yet to display any concrete signs of stability. While experts would argue that economic stability would seek to induce a stagnation of any potential recovery in specific sectors requiring growth to improve, analysts in the property sector are asserting that an underlying equilibrium is required in order for property supply and demand to achieve a balance.

As has previously been speculated, estate agents are amongst the only part of the property sector to be optimistic about the imminent recovery of the housing market. In an announcement that solidifies and verifies the whisperings amidst the burgeoning mortgage and flailing remortgages areas, the recent statistical increase in house prices against the similar statistics released 12 months prior demonstrates the continued recovery within the sector.

Statistics originating from a study of opinion within the estate agent sector provided documentation that the highest proportion of agents since 2006 are now experiencing distinct increases in property prices. Interpreting this news on face value would allow for a view of the market that holds against a strong recovery, however this vision does not include the states of other sectors that constitute the property market, such as remortgaging and refinancing property and equity release.

There are several industry bodies citing identical reasons for the apparent increase in property prices: the consumer demand for properties is outstripping the supply available. A spokesman for the Royal Institute of Chartered Surveyors highlighted the plight this issue causes the economy:

&quo;[The supply of property] is still insufficient to keep pace with the increase in demand which points to further prices gains in the near term.&quo;

Whilst it would appear to be logical to artificially increase the demand through incentives and a minimising of regulations on the property market, analysts are issuing warnings that flooding the market would unbalance the tentative price increases. However, it is of particular interest to note that the RICS have published statistics that detail 31 per cent of agents experiencing an increase of interest in mortgages.

As previously touched upon, gauging a recovery in the property market cannot solely be derived from the mortgage sector alone: analysts have reported a continued decrease in interest in and applications for remortgages and have also cited that the demand for equity release has not recovered in line with property price recoveries in the sector. It can be asserted that it is this underlying inequality in the parallel sectors that is providing the dichotomy of recovery.

While analysts are expecting the increases of prices of properties to be self-regulating inasmuch as supply steadily exceeding demand over the next year will cause a further dip in property prices, it is fair to state that most analysts are in agreement that for a stable recovery to be experienced, the entire economy is required to interact complimentarily.

This article was written by Donna Green on behalf of Remortgage.com - a website providing free information, tools and guides on matters of remortgaging or refinancing properties, equity release and remortgage advice.