UK Finance – Remortgaging rebounds to decade high
Remortgaging has reached its highest level in almost a decade as competition increases and a large number of fixed rates come to an end, according to the latest UK Finance figures.
Its data shows there were 50,500 new homeowner remortgages completed in October, 23.2% more than in the same month a year earlier. The £9.2bn of remortgaging in the month was 22.7% more year-on-year.
First-time buyer lending also rose by 8.2% year-on-year, while homemover figures were up by 4%.
Buy-to-let lending remained subdued, with purchases down 9% but remortgaging increasing by 5.4%.
Jackie Bennett, director of mortgages at UK Finance, said: “Remortgaging has reached its highest level in almost a decade, as homeowners 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.
“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.
“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.”
Jonathan Harris, director of mortgage broker Anderson Harris, commented: “Remortgaging is at a decade-high as borrowers, fuelled by continuing uncertainty around Brexit and the economy, take advantage of cheap rates. With the number of new purchases remaining subdued, lenders are focusing on where the business is and offering competitive deals to those coming off fixed-rate mortgages. This trend is set to continue into 2019.
“Landlords are also remortgaging as they make their property portfolios work harder and squeeze out every bit of profit they can. First-time buyers are taking advantage of the lack of competition from landlords for smaller properties, such as one-bedroom flats, and we expect this to continue into next year.”
Jeremy Leaf, north London estate agent and former RICS residential chairman, added: “Though a little historic, these figures do reflect what we have been seeing on the high street – in other words, buyers and sellers are trying to find an accommodation on price, with affordability just as important as Brexit when it comes to decision making.
“First-time buyers, in particular, are taking advantage of reduced competition from buy-to-let investors still compromised by recent tax and regulation changes.
“Political shenanigans seem to be more of a preoccupation among buyers in the southeast than elsewhere. It remains to be seen how the turmoil of the past month or so plays out in the market but the signs are so far that early new year activity will continue in a relatively subdued manner, much as it has over the past few months.”
Source: Financial Reporter