Buy-to-let falls as remortgaging business is boosted
There were just 5,500 new buy-to-let home purchase mortgages completed in September 2019, 3.5 per cent fewer than this time last year, according to UK Finance.
It recorded 12,900 remortgages in the buy-to-let sector, the same amount as in September 2018.
First-time buyer lending held steady in September, according to the trade association.
There were 29,100 new first-time buyer mortgages completed, 1.6 per cent more than in the same month in 2018. There were 29,050 homemover mortgages completed in September 2019, 1.8 per cent more than in the same month a year earlier.
But it was remortgaging business that boosted the mortgage market in September with borrowers keen to switch to a new deal.
There were 17,740 new remortgages with additional borrowing in September 2019, 5.9 per cent more than in the same month in 2018. For these remortgages, the average additional amount borrowed in September was £50,000.
There were 19,140 new pound-for-pound remortgages (with no additional borrowing) in September 2019, eight per cent more than in September 2018.
Mark Gordon, director of money, comparethemarket.com, said: “Remortgage activity has picked up again, with additional borrowing increasing by nearly 6% year on year. Providers are competing amongst themselves, slashing rates to attract new customers.
“Some of the most significant rate cuts are on five and 10-year deals, with homeowners increasingly opting for the longer term options. With rates so low, borrowers coming up to re-mortgaging could end up overpaying if they don’t search out a cheaper deal.
“Research shows over 800,000 UK homeowners are on a standard variable rate mortgage, which usually has an interest rate of around 4.5%. Comparing the different deals out there could save thousands of pounds, the equivalent of a pay rise, holiday or home improvements.”