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Mortgage lending ‘on the up’

Mortgage market on the up3

The appetite for home purchases is seemingly on the up as UK Finance Data has indicated that mortgage lending was higher in August 2017 than it was in both the preceding month and in the same month in 2016.

According to the data, home movers borrowed more than £8.4bn in August, 20 per cent more than was borrowed in August 2016 and 18 per cent more than in July 2017, demonstrating a strong housing market with buyers keen to secure new properties.

Commenting on the data, UK Finance’s head of mortgages policy June Deasy said: “Activity picked up in August, and recent resilience ensured that borrowing by home movers was at its highest since March 2016, when transactions were boosted by an imminent increase in stamp duty.”

First-time buyer appetite

The data revealed that first-time buyers are keen to snap up new homes, with those making their first property purchase taking out a total of 34,400 mortgages in August.

A total of £5.7bn was borrowed by first-time buyers, which is 16 per cent more than in July and 12 per cent more than in August 2016. With speculation increasing that interest rates may rise in November it is expected that figures for September and October will also indicate a growing desire for buyers to access the lowest mortgage rates.

On a seasonally adjusted basis, borrowing by first-time buyers and movers increased by both value and volume, with first-time buyers borrowed an average of £140,035 in August 2017, compared to £138,999 in July 2017.

Growing demand to remortgage

Speaking about the growing demand from homeowners looking to remortgage, June Deasy said: “Over the last 12 months, the number of people remortaging has been higher than in any period since late 2009. With mortgage rates close to historic lows and the likelihood of a rise in official rates moving closer, the popularity of remortgaging looks set to continue.”

Remortgaging by home owners accounted for £6.4bn of mortgage lending in August 2017, eight per cent more than in August 2016. The number of people remortgaging totalled 36,700, which was five per cent higher than in the same month in 2016.

Nick Chadbourne, chief executive of LMS, said: “Remortgagors are locking into record low rates to manage the impact of potential rate rises and bolster their financial security. This makes sense given borrowers were warned that time could be running out to fix into low cost deals in August.”

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