Remortgage market in the UK reaches decade high for month of July
Residential remortgage market in the UK saw its strongest July for a decade and buy to let mortgage numbers have risen, according to the latest figures to be published.
There were 46,900 new home owner remortgages completed in the month, some 23.1% more than in the same month a year earlier and the £8.7 billion of remortgaging in the month was up 26.1% year on year.
The data from UK Finance, which represents almost all lenders in the country also shows that there were 32,600 new home mover mortgages completed in the month, down 3.8% than in the same month a year earlier while the £7.3 billion of new lending was the same year on year.
There were 31,400 new first time buyer mortgages completed in the month, up 1% compared to the same month a year earlier. The £5.4 billion of new lending was up 5.9% on an annual basis.
The figures also show that there were 5,500 new buy to let home mortgages, down 14.1% compared with July 2017. By value this was £0.8 billion of lending in the month, 11.1% down year on year.
There were 14,700 new buy to let remortgages completed in the month, up 7.3% compared with the same month a year earlier. By value this was £2.4 billion of lending, up 9.1% year on year.
‘The residential remortgaging market saw its strongest July in over a decade as home owners pre-empted the latest Bank of England rate rise by locking into attractive fixed rate deals,’ said Jackie Bennett, director of mortgages at UK Finance.
‘There was also considerable growth in remortgaging in the buy to let sector, showing that while recent tax and regulatory changes are impacting on new purchases, many existing landlords remain in the market,’ she pointed out.
‘The number of first time buyers has returned to modest year on year growth. However, affordability remains a challenge for many prospective borrowers, underlining the importance of clarity over the future of schemes such as Help to Buy,’ she added.
Shaun Church, director at Private Finance, reckons that with many lenders expected to start upping their fixed rates once the Bank of England’s decision was announced, longer term fixes such as 10 year deals may well start to become more popular, particularly among cautious home owners who wants to ensure their monthly outgoings hold steady for as long as possible.
‘Remortgage activity appears to be the main thing keeping the buy to let market afloat. Although punitive regulatory changes have dissuaded new entrants to the market, today’s data suggests many existing landlords are staying put. With mortgage costs often being one of landlords’ biggest expenses, swapping to a lower rate deal is a sensible strategy for making a rental property more profitable,’ he added.