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October sees highest remortgage rate in a decade – UK Finance

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  • 12/12/2018
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October sees highest remortgage rate in a decade – UK Finance
Remortgaging hit its highest point in a decade in October as it continues to drive the market.

 

Encouragingly, first-time buyer and homemover mortgages also rose during the month.

Overall there were 50,500 residential remortgages completed in October, 23.2% more than in the same month a year earlier with the £9.2bn total value of remortgaging up 22.7%.

First-time buyer mortgage completions rose 8.2% to hit 32,900 and were worth £5.5bn, up 12.2% on October 2017.

And there were 33,400 new homemover mortgages worth £7.4bn, up 4% and 8.8% respectively.

The average first-time buyer loan size was £143,499, up by 3.2%, however loan-to-income (LTI) multiples were largely unchanged at 3.66 times salary for first-timers.

Homemover average loan sizes also grew to £183,150, up by 1.8%, while the LTI multiple here was also stable at 3.44.

 

Buy-to-let split

In contrast the buy-to-let sector data, which includes limited company lending, was split, with the remortgaging boost also present, although new mortgages fell.

Home purchase mortgage completions were down 9% to 6,100 worth £800m, down 20% compared to October 2017.

However buy-to-let remorgaging followed the residential trend, rising by 5.4% to 15,700 worth £2.5bn of lending, which was up 4.2%.

UK Finance director of mortgages Jackie Bennett said the figures were evidence of homeowners taking advantage of a competitive market and locking into attractive deals.

“This also reflects the large number of fixed rate mortgages coming to an end, which is expected to continue into 2019,” she said.

“There has been relatively strong growth in the number of first-time buyers, with schemes such as Help to Buy providing vital support to those getting a foot on the housing ladder.

“Meanwhile the buy-to-let market has seen a continued increase in remortgaging and a softening in home purchase activity, in line with ongoing trends in recent months,” she added.

 

Brexit turmoil hit

The wider economic and political situation was also cited as a key reason for people wishing to remortgage now.

Phoebus Software sales and marketing director Richard Pike said: “As we know many deals were coming to an end and the cautiousness around Brexit is making people look closely at their finances to see where they can find longer-term stability.

“The number of long-term fixes has increased throughout the year, and there are plenty of great deals across the market.

“Until we have some sort of a resolution regarding our exit from the EU this trend for remortgaging, rather than moving up the ladder, is likely to continue,” he added.

However, he was hopeful that once the first quarter of 2019 had been settled the market would come back to form.

Former Royal Institution of Chartered Surveyors residential chairman Jeremy Leaf added: “First-time buyers, in particular, are taking advantage of reduced competition from buy-to-let investors still compromised by recent tax and regulation changes.

“Political shenanigans seem to be more of a preoccupation among buyers in the southeast than elsewhere.

“It remains to be seen how the turmoil of the past month or so plays out in the market but the signs are so far that early new year activity will continue in a relatively subdued manner, much as it has over the past few months.”

 

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