UK Finance – Remortgaging jumps 20 per cent in May
The number of remortgages jumped by 20 per cent in May compared to a year earlier, the latest UK Finance lending figures reveal.
There were 21,370 remortgages with further equity withdrawn and 19,650 remortgages without extra borrowing, marking an increase of a fifth for both measures compared to last May.
The number of mortgages for first-time buyers rose by 0.5 per cent on last year at 30,720 and the total borrowed by this group was little changed at £5.1bn.
Borrowers took out 29,430 mortgages to move home in May, down 1.2 per cent on a year earlier, although the total borrowed was 1.7 per cent higher at £6.4bn.
Landlords took out 5,500 loans for to purchase properties, exactly the same number as in May 2018, but remortgage numbers were up by 20 per cent to 15,000 over the same period.
The total lent to landlords was identical to May 2018 at £3bn.
SPF Private Clients chief executive Mark Harris, says: “In nearly half of all remortgages, the homeowner is taking on some extra borrowing, confirming a trend we are seeing – that people are keen to stay put and improve or extend, rather than go to the considerable cost of moving to another property.
“Some borrowers are also releasing extra cash to help children or grandchildren onto the housing ladder or to cover other costs such as school fees, with older borrowers in particular taking advantage of the sizeable equity they have built up in their homes over time.
“Buy-to-let continues its steady trend, showing that investors are sticking with the sector rather than deserting it in their droves.
“That said, we are also not seeing a flood of new landlords – rather, the experienced ones are adding to their portfolios where they see opportunities and remortgaging to keep costs down.”
North London estate agent and former Royal Institution of Chartered Surveyors residential chairman Jeremy Leaf adds: “Mortgage trends are always interesting as a useful lead indicator of future market activity.
“These numbers are particularly interesting because although overall mortgage activity has declined compared with this time last year, the encouraging news is that first-time buyer numbers are proving more resilient than we might otherwise have expected.”
Leaf says first-time buyers are benefitting from reduced competition from buy-to-let investors and low mortgage rates.
Source: Mortgage Strategy