Remortgaging hits a ten year high

Remortgaging hits a ten year high

The residential remortgaging market has seen the strongest July in a decade. That’s according to new figures from UK Finance.

The findings by the industry trade body reveal that there were 46,900 new homeowner remortgages in July. That’s up by over 23% on the previous month. In addition, homeowners borrowed £8.7bn of remortgaging in the same period, resulting in a 26% increase year-on-year.

In August, the Bank of England raised its base rate by 0.5%. This was quickly followed by mortgage lenders increasing their interest rates.

The growth in remortgaging is thought to have been triggered by homeowners rushing to secure a cost-effective fixed repayment rate before this rise.

While the Bank decided against a further increase in September, experts are predicting a potentially volatile and unpredictable 2019. As such, remortgages may continue to rise as homeowners coming to the end of their fixed-rate deals start shopping around to set their repayment rates before the UK leaves the EU.

Commenting on the latest statistics, Jackie Bennett, director of mortgages at UK Finance, 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.

“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.

Other figures provided by UK Finance include:

  • There were 32,600 new home mover mortgages completed in July 2018, almost 4% fewer than in the same month a year earlier
  • The £7.3bn of new lending in the month was the same year-on-year
  • The average home mover is now 39 and has a gross household income of £57,000
  • There were 31,400 new first-time buyer mortgages completed in July 2018. Just 1% more than in July 2017
  • The average first-time buyer is 30 and has a gross household income of £42,000
  • There were 5,500 new buy-to-let home purchase mortgages completed in July 2018, around 14% fewer than in the same month in 2017
  • There were 14,700 new buy-to-let remortgages completed in July 2018. That’s over 7% more than in the same month a year earlier.

Bennett added: “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.”

Martin Parrin

Martin is a Senior Content Writer for Today’s Conveyancer, Today’s Wills and Probate, Today’s Legal Cyber Risk and Today's Family Lawyer Having qualified as a teacher, Martin previously worked as a Secondary English Teacher that responsible for Head of Communications. After recently returning to the North West from Guernsey in the Channel Islands, Martin has left teaching to start a career in writing and pursue his lifelong passion with the written word.

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