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Double-digit drop in remortgagors and buy-to-let buyers in March

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Written by: Christina Hoghton
16/05/2018
Fewer borrowers chose to switch their mortgage while the number of landlords buying dropped 20%, according to the latest figures.

Remortgaging levels softened after a busy start to the year, according to UK Finance.

In March there was £5.6bn of remortgaging, 9.7% down year-on-year. There were 32,400 new homeowner remortgages completed in the month, some 12% fewer than in the same month a year earlier.

Buy-to-let purchase business fell more significantly. There were 5,500 new buy-to-let home purchase mortgages completed in the month, 19% fewer than in the same month a year earlier. By value this was £0.8bn of lending, 20% down year-on-year.

UK Finance said the recent softening of the buy-to-let market is mostly down to a number of recent tax and regulatory changes, including the limiting of landlords’ Mortgage Interest Tax Relief (MITR), the 3% Stamp Duty surcharge and new underwriting requirements introduced by the Prudential Regulatory Authority (PRA).

Small boosts

First-time buyer lending held up better with a small increase in lending by value, despite fewer first-time buyers actually taking out deals. There was £5.1bn of new lending to first-time buyers in the month, up 2% year-on-year. 31,200 new first-time buyer mortgages were completed in the month, some 1.9% fewer than in the same month a year earlier. The average first-time buyer is 30 and has a gross household income of £42,000.

Jackie Bennett, director of mortgages at UK Finance, said: “Remortgaging levels softened in March, after a busier than usual start to the year saw customers locking into attractive deals ahead of a potential interest rate rise.

“There has been relatively flat growth in lending to first-time buyers, reflecting recent Bank of England figures showing a fall in mortgage approvals.

“Meanwhile the buy-to-let market remains subdued, as recent tax and regulatory changes continue to have an impact on demand.”

Separate figures from the Bank of England show that gross mortgage lending in the first quarter of 2018 was £61.1 billion, up 3.4% from £59.0 billion in the first quarter of 2017.

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