Pound-for-pound remortgage borrowing down 24%

Ryan Fowler

August 15, 2019

Pound-for-pound remortgage borrowing was down 23.9% on a year-on-year basis in June, according to the latest figures from UK Finance.

UK Finance attributed this to “a slight drop in the number of fixed-rate mortgages coming to an end and the growing popularity of product transfers”.

Remortgages with additional borrowing in June 2019 saw an increase however. Such borrowing was up 8.3% year-on-year.

Callum Bilbe, analyst, data and research at UK Finance, said: “Remortgaging activity can be volatile and there are often significant variations from month-to-month.

“For example, last month saw a 20% rise year-on-year in overall remortgaging, with growth in both the number of pound-to-pound mortgages and those with additional borrowing.

“Overall, the trend for remortgaging in recent years has been an upward one.”

Elsewhere new first-time buyer mortgages completed in the month were down 1.5% whilst homemover mortgage completions dropped 3.6% compared to the same month a year earlier.

Buy-to-let purchase mortgages were also down declining 3.6%.

Gareth Lewis, commercial director of property lender MT Finance, said: ‘There is an element of stagnation in the property market with people putting off buying, which is reflected in these figures. It isn’t surprising but it isn’t all doom and gloom, with transaction levels far from falling off a cliff.

‘There are still people looking to buy, whether that be a buy-to-let or because they are moving house.

“There also seems to be a growing interest in transactional purchases, which may be on the back of Boris Johnson becoming prime minister and people believing he will resolve Brexit one way or another. People are getting on with their lives, rather than getting bogged down in politics.

“What is refreshing is that we are hearing different topics on the political agenda, such as tackling crime, rather than Brexit all the time.

“With a number of homeowners taking equity out of their property, it looks as though this is going towards home improvements rather than debt consolidation as other figures suggest people aren’t taking on extra debt. This is encouraging as it will be improving the value of their home, rather than being spent on lavish holidays or new cars.”

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