UK Finance has published its latest mortgage trends figures which reveal that there was strong growth in remortgaging in April 2018, with new homeowner mortgages up 36 per cent and buy-to-let remortgages up 32.4 per cent compared to the same month a year earlier.

UK Finance has also published a blog analysing the factors driving this rise in remortgaging, including the large number of customers reaching the end of their mortgage deal rates and speculation that the Bank of England may raise interest rates.

Key data highlights:

  • There were 26,700 new first-time buyer mortgages completed in the month, some 3.5 per cent more than in the same month a year earlier. The £4.4bn of new lending in the month was 4.8 per cent more year-on-year.
  • The average first-time buyer is 30 and has a gross household income of £42,000.
  • There were 25,100 new homemover mortgages completed in the month, some 4.2 per cent fewer than in the same month a year earlier. The £5.4bn of new lending in the month was 3.6 per cent down year-on-year. The average homemover is 39 and has a gross household income of £55,000.
  • There were 40,800 new homeowner remortgages completed in the month, some 36 per cent more than in the same month a year earlier. The £7.5bn of remortgaging in the month was 44.2 per cent more year-on-year.
  • There were 5,000 new buy-to-let house purchase mortgages completed in the month, some 5.7 per cent fewer than in the same month a year earlier. By value this was £0.7bn of lending in the month, 12.5 per cent down year-on-year.
  • There were 14,300 new buy-to-let remortgages completed in the month, some 32.4 per cent more than in the same month a year earlier. By value this was £2.3bn of lending in the month, 35.3 per cent more year-on-year.

Commenting on the data, 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 fixed-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.”

Commenting on the figures Charles McDowell, Commercial Director, Mortgages at Aldermore said “Although we welcome the year-on-year increase in the number of first time buyers during May, the numbers are still underwhelming. An increase of 3.5% year on year only represents an extra 900 loans and given the recent stamp duty cut, the Help to Buy scheme and the fact that we are seeing historic low interest rates for first time buyers, this really is not good enough.”

“It is apparent first time buyers are still finding it difficult to get on the housing ladder, despite the recent measures taken by the government to make things easier. First time buyers are a key driver of the housing market but these figures reveal just how hard buying a first home really is.’

“Our latest First Time Buyer Index reflects this, showing that most (89%) prospective first time buyers believe getting on the property ladder is extremely hard. Raising a deposit is still the number one obstacle for four in 10 (40%) prospective first time buyers, and property prices are also cited as a barrier. Our research suggests low levels of confidence among those looking for their first home and this will have ramifications further up the housing chain.”