Remortgage and buy to let lending bounced back in the UK in April

The remortgage market in the UK recorded growth in April with lending to home owners up 36% and to landlords up by 32.4% year on year, new figures show.

The figures from UK Finance, which represents the majority of lenders in the country, also show that lending to first time buyers also rose, up by 3.5% compared to April 2017.

UK Finance says that a number of factors have driven the rise in remortgaging, including the large number of customers reaching the end of their mortgage deal rates and speculation that the Bank of England may raise interest rates.

A breakdown of the data shows that the £4.4 billion of new lending in the month to first time buyers was 4.8% more year on year and the average first time buyer is 30 and has a gross household income of £42,000.

In the home mover market there was £5.4 billion of new lending which was down 3.6% year on year and the average home mover is aged 39 and has a gross household income of £55,000.

The £7.5 billion of remortgaging in the month was up 44.2% year on year and in the buy to let sector the £0.7 billion of lending in the month was down 12.5% down year on year while for buy to let remortgages the value fell by 35.3% to £2.3 billion.

‘Remortgaging activity bounced back to strong levels in April, as both home owners and landlords locked into attractive fixed rate deals ahead of an anticipated interest rate rise,’ said Jackie Bennett, director of mortgages at UK Finance.

‘This spike in remortgaging was also driven by a large number of short term mortgage deal rates coming to an end, combined with increased efforts by lenders to contact their customers before their deal rate expires,’ she explained.

‘The number of first time buyers has grown year on year, outstripping the number of home movers. This may reflect the impact of measures such as the recent stamp duty cut and the Help to Buy scheme that are focused on getting more people onto the housing ladder,’ she added.

Kevin Roberts, director of the Legal & General Mortgage Club, pointed out that the current attractive rates for borrowers will not last indefinitely. ‘Increased innovation combined with competitive products means that activity within the mortgage market remains steady. First time buyers are continuing to make their moves through schemes such as Shared Ownership and Help to Buy, but these current rates will not last forever,’ he said.