Remortgaging surged 20% in May
Remortgage lending rose sharply in May, according to UK Finance, but the rest of the mortgage market remained on a go-slow.
The trade body said there were 21,370 new remortgages with additional borrowing taken out in May, 19.8 per cent more than during the same period in 2018. For these remortgages, the average additional amount borrowed was £52,000.
Many homeowners are borrowing more to improve their property instead of moving, according to one mortgage broker.
Andrew Montlake, managing director of Coreco, said: “The 20% increase in remortgages with additional borrowing confirms how a lot more people, given the uncertain climate, are seeking to add value to their existing homes rather than move.
“With mortgage rates so low, many people see extending and renovating their existing homes as a strategic move. They’re playing percentage property.”
Remortgaging on a like for like basis was also up strongly in May – there were 19,650 were pound-for-pound remortgages, a massive 19.7 per cent more than in May 2018.
But the purchase market remain slow, as economic and political uncertainty put off many buyers from making a commitment. UK Finance said there were 30,720 new first-time buyer mortgages completed in May 2019, just 0.5 per cent more than in the same month in 2018.
However, there were just 29,430 homemover mortgages completed in May 2019, 1.2 per cent less than in the same month a year earlier.
Montlake added: “The mortgage and property markets have slowed up slightly in June and July.
“With the prospect of a no-deal Brexit more likely if Boris becomes PM, homemover mortgages are likely to remain subdued during the rest of the Summer and Autumn.”