Homeowners struggling to find a new mortgage for their home have been dealt another blow, with so called “arrangement fees” from mortgage companies have rocketed to all time high levels.
According to a report from the financial information firm Moneyfacts, arrangement fees for both remortgages and first time buyer loans have soared in the last 12 months, with the average fee increasing by nearly 70%.
The “average” arrangement fee for all mortgages has increased from £889 a year ago to nearly £1,500 today – which staggeringly works out at almost a months pay for the average UK worker. In fact, some loans are currently charging an arrangement fee of almost £4,000.
The director general of the Council of Mortgage Lenders, Paul Smee, believes that many people will have to remain renting for much longer than they planned, with buying a property becoming an “unrealistic assumption” for many.