Remortgaging in the UK reaches its highest level for a decade

A competitive market in 2018 means that remortgaging has reached its highest rate for a decade as home owners have had access to a range of deals.

The latest monthly report from UK Finance shows that there were 50,500 new home owner remortgages completed in October, a rise of 23.2% compared with the same month in 2017.

The data also shows that the £9.2 billion of remortgaging in the month was 22.7% higher year on year.

There were 32,900 new first time buyer mortgages, a rise of 8.2% year on year the £5.5 billion of new lending in the month was up 12.2%.

With 33,400 new home mover mortgages completed, this increased by 4% and the £7.4 billion of new lending was 8.8% more year on year.

There were 6,100 new buy to let home purchase mortgages completed, down 9% compared with the same month last year by value this was £0.8 billion of lending, down 20% year on year.

The data also shows that there were 15,700 new buy to let remortgages, down 5.4% year on year and by value this was £2.5 billion, a fall of 4.2%.

‘Remortgaging has reached its highest level in almost a decade, as home owners take advantage of a competitive market and lock into attractive deals. This also reflects the large number of fixed rate mortgages coming to an end, which is expected to continue into 2019,’ said Jackie Bennett, director of mortgages at UK Finance.

‘There has been relatively strong growth in the number of first time buyers, with schemes such as Help to Buy providing vital support to those getting a foot on the housing ladder,’ she pointed out.

‘Meanwhile the buy to let market has seen a continued increase in remortgaging and a softening in home purchase activity, in line with ongoing trends in recent months,’ she added.

According to Dilpreet Bhagrath, of online mortgage broker Trussle, the figures give a far more positive picture of the housing market than has been seen in recent months, especially the steep rise in remortgaging levels, which suggests that fewer home owners are letting their loans default onto Standard Variable Rates when the initial term of their mortgage deal ends.

John Eastgate, sales and marketing director at OneSavings Bank, the increase in first time buyer lending is a testament to the sheer scale of pent up demand for housing in the face of Brexit uncertainty and the ongoing attractiveness of Help to Buy.

‘Even so, it is remortgaging driving the market onwards, as borrowers look to lock in affordable rates for the future and with swap rates seeming to point towards rates remaining low for the long term, they might have plenty of time to do so,’ he said.

The remortgage market is benefiting from a perfect storm, according to Keith Haggart, managing director of lifetime mortgage provider Responsible Lending. ‘Frenzied rate competition and a wave of fixed term deals expiring is driving a tsunami of activity, aided by the fact millions on SVRs will be attempting to lock in some of these extremely attractive rates while they’re still on the table,’ he said.

John Phillips, group operations director at Just Mortgages and Spicerhaart, believes that there will probably be another dip in home mover activity at the start of 2019. ‘But I think remortgaging will remain strong. There are lots of fixed-rate deals coming to an end, and people are keen to lock in good fixed rate deals now, before potential rate rises,’ he said.