You are here: Home - Mortgages - Remortgage - News -

Remortgaging volumes surge as purchases hold steady

0
Written by:
16/07/2019
The number of remortgages completed in May grew sharply compared to the same month last year while purchases dipped slightly, data shows.

Encouragingly, both figures were up on volumes for April 2019, while the buy-to-let market appears to have stabilised over the last year, following tax and regulation changes.

The figures from banking trade association, UK Finance, show overall 60,150 residential purchase mortgages were completed in May, down 0.3 per cent from the 60,350 in May 2018, but up from 53,330 in April.

There were 30,720 new first-time buyer mortgages completed in May, 0.5 per cent more than a year earlier, but homemover mortgages dropped 1.2 per cent to 29,430.

Remortgaging surge

In contrast, remortgaging surged in May by almost 20 per cent compared to the same month last year, hitting 41,020 completions – up from 34,250 in May 2018 and 38,380 in April 2019.

This change was reflected in additional borrowing and pound-for-pound remortgaging.

There were 21,370 new remortgages with additional borrowing, up 19.8 per cent on the same month in 2018, with the average additional amount borrowed being £52,000.

Pound-for-pound remortgages with no additional borrowing also rose 19.7 per cent to reach 19,650.

This growth was reflected in lending values which reached £7.3bn, up from £6bn and £6.8bn in May 2018 and April 2019 respectively.

Buy-to-let plateau

Buy-to-let borrowing appears to have maintained its plateau of the last 12 months, with 5,500 new purchase mortgages completed in May 2019, the same number as last year, and there were 15,000 remortgages, a two per cent increase.

Over the last year the number of new purchase mortgages per month has averaged 5,458 with remortgages averaging 14,100.

Lending volumes have also remained consistent with averages of around £700m in new purchase lending per month and £2.3bn in remortgaging.

Add value rather than move

Andrew Montlake, managing director of Coreco, noted that the 20 per cent increase in remortgages with additional borrowing confirmed that a lot more people were seeking to add value to their existing homes rather than move.

“With mortgage rates so low, many people see extending and renovating their existing homes as a strategic move. They’re playing percentage property,” he said.

“More broadly, the mortgage and property markets have slowed up slightly in June and July.

“With the prospect of a no-deal Brexit more likely if Boris Johnson becomes prime minister, homemover mortgages are likely to remain subdued during the rest of the summer and autumn.”

However, he added that there was a lot more activity among professional property investors at present, as they were thriving in the current uncertainty and negotiating hard on price.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Autumn Statement: Everything you need to know at a glance

Yesterday Chancellor Jeremy Hunt made his first fiscal statement in the role, outlining a range of tax measure...

End of Help to Buy: 10 alternatives for first-time buyers

The deadline for Help to Buy Equity Loan applications passed on 31 October. If you’re a first-time buyer who...

Moving to an energy prepayment meter: Everything you need to know

As households struggle with the soaring cost of energy, tens of thousands of billpayers are expected to move o...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week