Homeowners looking to remortgage to assist in loosening up a tight household budget will not be happy to hear that the UK economy is much worse off than previously thought.  Going into the new year with the possibility of a second recession made lenders nervous and lending criteria tightened up.  With news that the final quarter GDP was worse than previously expected will not do well to loosen up the lending grip of lenders.  It could get harder for remortgage approvals.

The reported fall of the GDP was downgraded from 0.2 per cent in the fourth quarter to 0.3 per cent.  In addition it was reported that disposable incomes had fallen 1.2 per cent which is the worst decline since 1977.  The Office of National Statistics stunned with the announcement of an adjustment to the fourth quarter GDP due to there having been no expectation for any adjustment to be made.

Jason Conibear, from Cambridge Mercantile, commented on the fall of the sterling to the euro after the announcement of the downgraded revision, “Sterling hit the deck on the back of this downward revision. And it could be a long count before it gets back up on its feet.

“What this revision to the fourth-quarter data reinforces is that the UK economy is febrile at best. The consensus appears to be that we will avoid a technical recession due to an improvement during the first quarter of this year but there's still a very recessionary feel to the current climate.”

For those that can use a remortgage in this difficult economic time it could be well worth the effort to seek out a remortgage broker.  Homeowners with complicated remortgages or those hoping to pass through the process smoothly should consider the assistance of a remortgage expert.