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Remortgaging rockets while purchase business falls

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New figures show homeowners are cautious about moving, but they are still switching their deals as rates remain competitive
Remortgaging rockets while purchase business falls

There were 16,810 new remortgages with additional borrowing in March 2019, a massive 9.1 per cent more than in the same month in 2018, said UK Finance.

The trade body noted that, for these remortgages, the average amount taken out in March was £55,700.

Additionally, 15,030 were simple pound-for-pound remortgages (with no additional borrowing), 1.1 per cent fewer than in March 2018.

In total, there were 4.1 per cent more residential remortgages in March 2019 than in the same month a year earlier, marking the 12 consecutive month of year-on-year growth in remortgaging.

Homebuying falls

There were 28,800 new first-time buyer mortgages completed in March 2019, 2.4 per cent fewer than in the same month in 2018 – the first year-on-year decrease in first-time buyers since September 2018. There were 25,280 homemover mortgages completed in the month, six per cent fewer year-on-year.

Buy-to-let purchase business continued to fall. There were 5,000 new buy-to-let home purchase mortgages completed in March 2019, 9.1 per cent fewer than in the same month in 2018.

Andrew Montlake, director of the UK-wide mortgage broker, Coreco, said: “With rates nearing rock-bottom given the intensity of competition among lenders, remortgages have gone off the Richter Scale. The 9.1% rise in additional borrowing remortgages compared to a year ago reflects the fact that a lot of people are choosing to add value to their existing homes rather than move.

“While homemover mortgages were down in March, purchases have really started to gain momentum since April, with the usual late Spring lift being boosted by a growing indifference to Brexit.

“While there was a slight decrease in first-time buyer mortgages, they are still generating most of the momentum in the purchase market. We are also now seeing more activity further up the property ladder, as people’s lives have been on hold for long enough. The window shoppers of 2018 now have their wallets out and are making genuine offers.”

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