e.surv – Remortgage activity surges in July
Remortgages remain the main area of activity in the mortgage market as the wider housing market stalled in July, according to the latest figures from e.surv.
Its research found that there were 65,770 residential mortgages approved during July – 0.8% higher than the same point in 2018, but a fall of 1% compared to June 2019’s total.
The strongest activity was in the remortgage market, as demonstrated by the proportion of loans going to large-deposit borrowers with LTVs below 60%.
This group of borrowers grew their market share from 24.7% in June to 26.6% in July.
In July, 27.9% of all mortgage completions were carried out by small-deposit borrowers, the same as the previous month, but higher than the 27.7% recorded in May.
Yorkshire reclaimed its crown as the best location for buyers with a small deposit in July. The region claimed this title for the first five months of 2019 but was toppled by Northern Ireland in June.
However, Yorkshire was able to leapfrog its rival in July, with 35.4% of all mortgages in the region going to those with small deposits. This was ahead of Northern Ireland’s figure of 34.5%.
Elsewhere, the North West (33.0%) and the Midlands (32.1%) were the only other areas to see more than 30% of their loans go to this market segment.
Richard Sexton, director at e.surv, commented: “Current mortgage rates remain at a historically low level and this certainly appears to be tempting some new borrowers into the market.
“For those lucky enough to already own a home, these rates have encouraged many existing homeowners to remortgage at a low rate and give themselves security over their payments in the coming years.
“These rates, coupled with a general slowdown in house price growth, are helping more young buyers, who are often strapped for cash, onto the ladder. Despite this, the market for purchase mortgages remains largely flat.
“Despite a scorching hot July across much of the country, remortgage activity remained strong during the month.
“The number of small-deposit buyers securing a mortgage in July remained similar to the high levels recorded in June, as some house hunters shunned the beach and headed to the estate agent.”
Source: Financial Reporter