First-time buyer lending boost in July, but fewer remortgage
Fewer people are remortgagaging, according to lender trade body UK Finance, which recorded a dip in switchers over the summer.
It said there were 20,760 new remortgages with additional borrowing in July 2019, 7.1 per cent fewer than in the same month in 2018.
There were 20,380 new pound-for-pound remortgages (with no additional borrowing), 12.9 per cent fewer than in July 2018. UK Finance said that this has been ‘driven in part by a fall in the number of fixed-rate mortgages coming to an end and the growing popularity of product transfers’.
With a product transfer the borrower simply switches their rate to a new deal with the same lender – a process that can often be done online without advice.
This is different to a remortgage where the borrower switches to a new lender and therefore goes through a full mortgage application process again.
Purchase business up
Despite the remortgage dip, lending for house purchases was up in July.
There were 32,640 new first-time buyer mortgages completed in July 2019, 5.8 per cent more than in the same month in 2018.
There were 32,710 homemover mortgages, 1.4 per cent more than in the same month a year earlier.
And there were 5,800 new buy-to-let purchase mortgages, 5.5 per cent more than this time last year.
Andrew Montlake, managing director of mortgage broker, Coreco, said: “First time buyers continued to drive the mortgage market during the summer months, which is reflected in this data.
“What’s also encouraging is the pick-up in buy-to-let purchase mortgages. After a tumultuous four years, the market appears to have bottomed out.
“We urge people to not rush into a product transfer as while the rates being offered might look competitive, there will often be something better out there.”