The mortgage market has seen a pre-summer boost as there were 36,000 new homeowner remortgages completed in the month, some 7.1% more year-on-year, UK Finance’s Mortgage Trends Update has found.
The £6.3bn of remortgaging in the month was 6.8% more year-on-year. There were 32,200 new first-time buyer mortgages completed in the month, some 8.1% more than in the same month a year earlier.
The £5.4bn of new lending in the month was 12.5% more year-on-year and the average first-time buyer is 30 and has a gross household income of £42,000.
Steve Seal, director of sales and marketing, Bluestone Mortgages, said: “Whilst it’s good to see continued first-time buyer activity, these results do not reflect the growing pool of borrowers who struggle to access funding.
“Contractors, entrepreneurs or self-employed workers with complex financial backgrounds usually struggle to meet the vanilla criteria of high-street lenders – even if they have a reliable history of repayments.
“The specialist lending market has a significant role to play in closing this funding gap; providing a service that understands an individual’s circumstances and supporting borrowers in their homeownership aspirations.”
There were 31,100 new homemover mortgages completed in the month, some 4.4% more than in the same month a year earlier.
The £6.6bn of new lending in the month was 4.8% more year-on-year and the average homemover is 39 and has a gross household income of £55,000.
There were 5,500 new buy-to-let home purchase mortgages completed in the month, some 9.8% fewer than in the same month a year earlier. By value this was £0.7bn of lending in the month, 22.2% down year-on-year.
There were 14,600 new buy-to-let remortgages completed in the month, some 15% more than in the same month a year earlier. By value this was £2.3bn of lending in the month, 21.1% more year-on-year.
Matt Andrews, managing director of mortgages at Masthaven, said: “Growing first-time buyer figures represent a huge bright spot in mortgage lending, with figures even outstripping homemovers.
“Likely to be attracted by good rates, the various government backed schemes and the emergence of challenger banks and specialist lenders who provide alterative options to the big high street names, the choice for first-time buyers has never been so good.
“As expected, remortgaging continues to rise, largely due to the anticipated Bank of England rate rise.
“While uncertainty remains around timescales, brokers need to see this as an opportunity to reengage with their back-books.
“The same opportunity can be seen in the buy-to-let space – much work needs to be done here to attract new and veteran landlords, with specialist lenders leading the way in providing flexible and innovative products.”
Jackie Bennett, director of mortgages at UK Finance, said: “The mortgage market is seeing a pre-summer boost, driven by a rise in the number of first-time buyers and strong remortgaging activity.
“It is also particularly encouraging to see an increase in homemovers, after a period of relative sluggishness in this important segment of the market.
“However, affordability remains a challenge for some prospective buyers and this is reflected by a gradual increase in loan to income multiples.
“Meanwhile purchases in the buy-to-let market continue to be constrained by recent regulatory and tax changes, the full impact of which have yet to be fully felt.”