Mortgages

Remortgaging sparks pre-summer market boost: UK Finance

The mortgage market is seeing a pre-summer boost, driven by a rise in the number of first-time buyers and strong remortgaging activity, according to the latest UK Finance data.

Rozi Jones
|
12th July 2018
Summer house garden
"On the ground, business is still one month up, one month down, with no clear pattern other than a fairly fragile price-sensitive market where confidence is weak at best."

The mortgage market is seeing a pre-summer boost, driven by a rise in the number of first-time buyers and strong remortgaging activity, according to the latest UK Finance data.

There were 32,200 new first-time buyer mortgages completed in the month, 8.1% more than in the same month a year earlier.

Remortgages totalled 36,000 in May - up 7.1% by volume and 6.8% by value compared to 2017.

31,100 new homemover mortgages completed in May, 4.4% more than in the same month a year earlier.

Buy-to-let purchase mortgages dropped by 9.8% year-on-year to 5,500, but buy-to-let remortgages rose by 15% to 14,600.

Jackie Bennett, director of mortgages at UK Finance, said: "The mortgage market is seeing a pre-summer boost, driven by a rise in the number of first-time buyers and strong remortgaging activity. It is also particularly encouraging to see an increase in homemovers, after a period of relative sluggishness in this important segment of the market.

"However, affordability remains a challenge for some prospective buyers and this is reflected by a gradual increase in loan to income multiples.

"Meanwhile purchases in the buy-to-let market continue to be constrained by recent regulatory and tax changes, the full impact of which have yet to be fully felt.”

Jeremy Leaf, north London estate agent and former RICS residential chairman, added: "After yesterday’s better-than-expected economic growth figures, these strong numbers from UK Finance, although a little historic, reinforce the view that interest rates are likely to rise sooner rather than later.

"Unfortunately, any imminent rate rise is likely to have a disproportionately negative effect on already brittle confidence.

"On the ground, business is still one month up, one month down, with no clear pattern other than a fairly fragile price-sensitive market where confidence is weak at best."

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