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Residential market rebounds as BTL purchases slide – UK Finance

  • 19/11/2019
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Residential market rebounds as BTL purchases slide – UK Finance
Mortgage lending grew by 4.6 per cent to £21.4bn year-on-year in September, driven by an energetic remortgage sector, while buy-to-let (BTL) cooled, UK Finance data revealed.


Loan to values (LTVs) eased across first-time buyer (FTB), homemover and remortgage transactions.

In the new loans market, the volume of FTB mortgages grew 1.6 per cent to 291,000 in September 2019 over the same month in 2018. The value was up five per cent to £5.1bn.

The volume of homemover mortgages rose 1.8 per cent to 29,050 and value grew 5.4 per cent to £6.6bn.

In remortgages, the volume of loans with additional borrowing was up 5.9 per cent to 17,740 and value increase 5.1 per cent to £3.3bn, with the average additional amount borrowed was £50,000. 

Remortgages with no additional borrowing grew eight per cent to 19,140 by volume and 9.4 per cent to £3.4bn by value.

However, the BTL sector dragged behind. The number of purchase mortgages dropped 3.5 per cent to 5,500 and the value was down 11.1 per cent to £800m.

BTL remortgages were flat at 12,900 by volume and by value at £2.2bn.



Affordability looked to have been relatively stable, while LTVs eased very slightly. For FTBs, the average LTV was 76.8 per cent, down on 77.5 per cent on September 2018.

For homemover mortgages, LTVs fell to 66.4 per cent, against 67.2 per cent last year.

And remortgage LTVs dropped to 57.4 per cent, down from 58.6 per cent.

FTBs saw average income multiples ease to 3.52, against 3.53 in September 2018. The average FTB loan size was £174,223 and age 32.

For homemovers, the income multiple edged up to 3.31, against 3.30 in September 2018. Average loan size was £229,000 and age 41. 

In remortgages, the income multiple was 2.80, up from 2.77 last year. The loan size was £180,119 and age of borrower 42. 


Industry takes

Industry watchers welcomed the generally positive picture.

Nick Chadbourne, chief executive at LMS, said: “We’re starting to see a shift in the balance of power within this market. Lower rates on two-year deals have sparked competition between lenders, aiming to turn the heads of remortgagers. Our recent data shows that although five-year fixes remain the most popular product, purchases of two-year deals have surged.”

John Phillips, national operations director at Just Mortgages, said: “This is a strong set of figures, with both new loans and especially remortgages showing a big improvement on the same time last year.

“The eight per cent rise in pound-for-pound remortgages in particular is a welcome reversal of recent trends, where the increased prevalence of longer-term fixes has been driving down volumes.

“This is somewhat offset by the quite steep fall in new BTL mortgages – more than 11 per cent by value. There have been a number of changes to regulations in recent years, not to mention the impact of the stamp duty surcharge for BTL. It would not be surprising if this was deterring landlords from expanding their portfolios and putting new entrants off altogether,” Phillips added.

Richard Pike, sales and marketing director at Phoebus Software, said he felt “encouraged” by the figures adding “however, we do have to take heed of the fact that the buy-to-let sector is still suffering.”

Louisa Sedgwick, director of sales, mortgages, Vida Homeloans, said: “Today’s data shows a reasonable degree of resilience among the FTB market and it is encouraging.”


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