As home prices grow in the UK new home buyers are finding it more and more difficult to finance their new home. The problem is that UK salaries haven’t grown at the same rate as house prices have. In fact over the past decade home prices have outpaced salary increases by a two to one factor making mortgages a harder thing to finance.
While this is a bad thing for the market in general some banking institutions are offering special financial tools to help cope with the larger loans. Consumers art taking out mortgage protection which ensures their loan in an event they can no longer work and pay off their loan. In addition, banks are offering current home owners to take out remortgages in order to monetize their higher home price and use the difference in price of their new and old mortgage for other needs.