Additional borrowing averaged £51,000 for the month, representing a 22 per cent decrease to £3.5bn.
The figures, from UK Finance’s Mortgage Trends Update, also showed the number of pound-for-pound remortgages drop by 20 per cent to 20,660. The average value fell 19 per cent to £3.6bn year-on-year.
However, this followed relatively strong figures in September where remortgages increased 5.9 per cent and pound-for-pound remortgages grew eight per cent.
Homemover and FTB growth
The number of mortgages taken out by homemovers and first-time buyers grew in October, with year-on-year increases of 4.7 per cent and 2.8 per cent respectively.
This amounted to 33,370 new homemover mortgages and 32,260 first-time buyer mortgages.
The value of new lending to first-time buyers increased eight per cent to £5.6bn and for homemovers it rose 8.2 per cent to £7.6bn.
There were 6,600 new buy-to-let home purchase mortgages completed in October 2019, 1.5 per cent fewer than for the same month last year.
The buy-to-let sector saw 16,200 remortgages, 2.4 per cent fewer than in the same month 2018.
Loan to value (LTVs) for first-time buyers averaged 78.2 per cent, up by 1.2 per cent.
For homemovers, LTVs averaged 67.3 per cent, up 1.2 per cent. For remortgages, there was no change with the average LTV 58 per cent.
The average loan size for a first-time buyer in October was £174,133, up five per cent. For homemovers this increased 3.8 per cent to £228,162.
Remortgage loans dipped by 0.2 per cent to £182,244.
Loan to income (LTI) multiples rose 0.04 per cent for first-time buyers to 3.54. For remortgages LTIs stood at 3.32, up a 0.03 per cent.
For homemovers, the average LTI was 2.78, down 0.03 per cent.
Remortgage figures not a concern
“The drop-off in remortgages was a cyclical event rather than a cause for concern,” said Sam Harhat, head of financial services at Andrews Property Group.
“It’s also a sign that many people have already remortgaged onto the exceptionally competitive rates available.
“After a very strong year, remortgaging numbers dipped in October, suggesting that many of those who needed to refinance have done so, and taken advantage of the cheap rates available,” Harris added.
Fewer ‘novice’ landlords
Mark Harris, chief executive of SPF Private Clients, said this decline was down to “a lack of novice landlords entering the sector”.
“Those established landlords continue to stay invested and expand their portfolios where they find opportunities,” he said.
Andrew Montlake, managing director of Coreco, said: “Looking forward, we’re predicting an uplift in transaction levels during the first half of 2020, as buyers and sellers take confidence from the General Election result.
He added that due to borrowing costs remaining competitive, people had “even more reason” to buy and sell.
“Even though there’s still a lot of uncertainty as to the intricacies of how we leave the EU, people at least now know it’s coming and that creates confidence,” he said.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said the direction of the trends demonstrated by the figures were “encouraging”.
“It demonstrates, once again, the underlying resilience and expectation of better times to come in 2020 now that the election is behind us,” Leaf said.