New homeowner remortgages increased by 23.1% in July from the same month a year earlier to stand at 46,900, while new home mover mortgages dropped by 3.8% to 32,600, according to the latest figures released by UK Finance.
The £8.7bn of remortgaging in the month was 26.1% more year-on-year, while the £7.3bn of new lending in the month was the same year-on-year.
First-time buyer mortgages and buy-to-let home purchases
New first-time buyer mortgages increased by 1.0% to stand at 31,400, compared to the same month a year earlier.
The £5.4bn of new lending in the month was 5.9% more year-on-year.
There were 5,500 new buy-to-let home purchase mortgages completed in the month, some 14.1% fewer than in the same month a year earlier. By value this was £0.8bn of lending in the month, 11.1% down year-on-year.
There were 14,700 new buy-to-let remortgages completed in the month, some 7.3% more than in the same month a year earlier. By value this was £2.4bn of lending in the month, 9.1% more year-on-year.
Homeowners lock fixed-rate deals after BoE rate rise
Director of mortgages at UK Finance Jackie Bennett (pictured) said the residential remortgaging market saw its strongest July in over a decade, as homeowners pre-empted the latest Bank of England rate rise by locking into attractive fixed-rate deals.
She said: “There was also considerable growth in remortgaging in the buy-to-let sector, showing that while recent tax and regulatory changes are impacting on new purchases, many existing landlords remain in the market.
“The number of first-time buyers has returned to modest year-on-year growth. However, affordability remains a challenge for many prospective borrowers, underlining the importance of clarity over the future of schemes such as Help to Buy.”
The era of low interest rates will not last forever
Kevin Roberts, Legal & General Mortgage Club director Kevin Roberts said that increased innovation coupled with competitive solutions continues to drive the mortgage market forward.
He added: “Government schemes like shared ownership and Help to Buy are giving thousands of first-time buyers that extra bit of support they need to secure their first home.
“However, we all need to be prepared for potential changes in the market that may lie ahead. Regardless of the Bank of England’s decision tomorrow, the era of low interest rates will not last forever.
“Those coming to the end of their mortgage term, or indeed seeking their first mortgage, should speak with an adviser now to secure a good deal while rates remain at near record low levels. Not only will advisers be able to provide a far wider range of products, but they can also give buyers the guidance and support they need when planning their first or next step on the housing ladder.”
Rob McCoy, senior product & business manager at TMA, said that it is likely the low number of people moving home can be attributed to the World Cup having temporarily distracted a lot of the UK’s attention, alongside the annual flurry of summer holidays.
He added: “Advisers should already have been working hard to contact their backbook and secure clients the best rates on the market, particularly in the wake of the interest-rate rise in August. As autumn approaches we are expecting to see clients settle in their properties with longer, fixed term rates.”