Huge boost in remortgaging as borrowers switch and save
There was strong growth in remortgaging in April 2018, with new homeowner mortgages up 36% and buy-to-let remortgages up 32.4% compared to the same month a year earlier, according to UK Finance.
The trade body suggested that the boost came from the large number of customers reaching the end of their mortgage deal alongside speculation that the Bank of England may raise interest rates in May (speculation that proved unfounded when rates were held).
Lending to first-time buyers was also up, by 4.8%, while homemover lending fell by 3.6% over the year, and buy-to-let purchase lending was down a significant 12.5%.
Jackie Bennett, director of mortgages at UK Finance, said: “Remortgaging activity bounced back to strong levels in April, as both homeowners and landlords put their house in order by locking into attractive fixed-rate deals ahead of an anticipated interest rate rise.
“This spike in remortgaging was also driven by a large number of short-term mortgage deal rates coming to an end, combined with increased efforts by lenders to contact their customers before their deal rate expires.
“The number of first-time buyers has grown year on year, outstripping the number of homemovers. This may reflect the impact of measures such as the recent stamp duty cut and the Help to Buy scheme that are focused on getting more people onto the housing ladder.”