First-time buyer mortgages completed in June totalled 34,900, a drop of 3.6% compared with the same month a year earlier, according to the latest figures released by UK Finance.
The £5.8bn of first-time buyer lending in the month was 1.7% down year-on-year, with the average first-time buyer aged 30 and having a gross household income of £42,000.
There were 33,700 new home mover mortgages completed in June, 7.9% down on the same month in 2017, with the £7.3bn of new lending in the month also down 6.4%.
The average home mover was 39 and had a gross household income of £56,000.
In contrast remortgaging continued to push forward with 37,400 new homeowner remortgages completed in June, up 8.4% from the same month a year earlier.
The £6.8bn of remortgaging in the month was also 13.3% up year-on-year.
Buy-to-let (BTL) home purchase mortgages completed in June dropped sharply by 19.4% to 5,400 while the £0.8bn lending was 11.1% down.
There were 12,600 new buy-to-let (BTL) remortgages completed in the month of June, the same as June 2017. By value this was £2.0bn of lending in the month, the same year-on-year.
Jackie Bennett, director of mortgages at UK Finance (pictured), said: “Remortgaging continued to dominate in June with figures up 13% on the same period last year as existing two and three year products came to an end and borrowers opted for new deals.
“Despite a boost in recent months, speculation of a base rate rise saw the market remain relatively subdued with year-on-year declines in activity among both first-time buyers and home movers as customers adopted a wait and see approach.
“House price inflation has moderated in recent months yet it still remains above earnings growth, and so affordability is still a challenge for would-be borrowers.
“And although the full impact has yet to be felt, tax and regulatory changes continue to bear down on borrowing activity in the buy-to-let purchase market,” she added.
Continuation of housing challenges
John Eastgate, sales and marketing director at OneSavings Bank, said: “The housing market slowed as economic uncertainties persisted thanks to Brexit and well-founded expectations of a rate rise.
“Stamp duty continues to deter purchase activity in more expensive areas and this has consequences for the whole market, so the large fall in purchase activity is no great surprise. With activity falling, housebuilding way off its long term target and a continuing lack of political clarity on housing policy, we will surely see a continuation of current housing challenges.
“The social housing sector clearly won’t be able to plug the demand gap, with any form of additional funding conspicuous by its absence in the social housing green paper. All this means is that as demand for housing continues to grow, supply isn’t rising fast enough, so rather than taxing the private rental sector more, as has been speculated, it should be seen as part of the solution.”
Victoria Jefferies, proposition director at Primis and PTFS, said the demand for remortgages continued to be a key theme in the wake of the Bank of England’s rate rise.
She added: “These figures are not only testament to the hard work that brokers have done to educate their customers about the benefits of remortgaging, but also show that borrowers are eager to lock in favourable rates before any further rate rises.
“It would be great to see a rise in the number of first-time buyers next month as innovation in the mortgage market continues to heat up, making it easier for these borrowers to access the funds they need.
“Brokers and lenders are continuously looking for ways to simplify the mortgage process to ensure more people can get their foot onto the properly ladder – so watch this space.”