The number of remortgages in January 2018 reached a nine-year high, while the number of first-time buyers and home movers both increased year-on-year.
UK Finance’s latest mortgage trends update found there were 49,800 new homeowner remortgages completed in January, some 19.1% more than in the same month a year earlier.
This is the highest monthly number of remortgages since November 2008, when the figure stood at 51,300. The £8.9bn of remortgaging in January 2018 was 20.3% more year-on-year.
There were 24,500 new first-time buyer mortgages completed in January 2018, some 7% more than in the same month a year earlier.
Jackie Bennett, director of mortgages at UK Finance, said: “Remortgaging in January reached a nine-year high, as a number of fixed rate mortgages came to an end while borrowers locked into attractive deals amid expectations of further interest rate rises.
“While an increase in remortgaging is expected in the New Year as people put their household finances in order, this strong growth is above the seasonal fluctuations we tend to see at this time of year.”
The £4bn of new lending in the month was 11.1% more year-on-year. The average first-time buyer was 30 and had a gross household income of £41,000.
There were 25,000 home mover mortgages completed in January 2018, 6.4% more than in the same month a year earlier.
The £5.4bn of new lending in the month was 10.2 more year-on-year. The average home mover was 39 and had a gross household income of £55,000.
There were 5,600 new buy-to-let house purchase mortgages completed in January, 5.1% fewer than in the same month a year earlier. By value this was £0.8bn of lending in the month, the same year-on-year.
There were 16,500 new buy-to-let remortgages completed in January, 17.9% more than in the same month the year before. By value this was £2.6bn of lending in the month, 18.2 per cent more year-on-year.
Bennet added: “There was the usual dip in both first-time buyers and home movers post the December festive period, but mortgage lending in both segments increased compared to the same period in 2017.4
“However, growth in the buy-to-let market remains subdued, reflecting the ongoing impact of recent tax and regulatory changes.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, was not surprised to hear there were more remortgages.
He said: “It is no surprise that remortgaging levels are so high with borrowers worried about potential interest rate rises on the horizon. Many are choosing to lock into longer-term fixes of five years, as rates are still extremely competitive, even though they are now on the rise so it may be wise not to hang around for too long.”
Richard Sexton, director of e.surv Chartered Surveyors, was pleased to hear about more first-time buyers getting onto the property but still thinks the government needs to do more.
He said: “It’s positive to see an increase in lending to first-time buyers. Our latest Mortgage Monitor revealed similar trends, showing one-fifth of all mortgage approvals went to first-time buyers. We believe this can be attributed to the near record low mortgage rates and increased support from the government.
“However, while the government may have shown its commitment in helping first-time buyers onto the property ladder, more needs to be done to encourage movement in the second stepper and last time buyer market. Ultimately, lack of supply remains an issue.”