The housing market enjoyed its busiest February for a decade with 50,000 mortgages completed for house purchase during the month. This is the highest level since February 2007 according to the latest figures from UK Finance.
UK Finance’s monthly lending report paints a more optimistic picture of the mortgage market, with lending for first-time buyers, home movers and those remortgaging increasing year on year.
The report shows there were 25,200 new first-time buyer mortgage completed in February 2018, a 2.4 per cent increase on the same month the year before.
The accounted for £4bn of new lending – a 2.6 per cent increase year-one year. The average first-time buyer is now aged 20 with a gross household income of £41,000.
There were slightly fewer home loans arranged for those moving house. There were 24,800 home mover mortgages, the same as the year before. However, this £5.3bn of new lending was 1.9 per cent month than a year ago. The average homemover is 39 and has a gross household income of £55,000.
The largest increase has been in the volume and value of remortgages. There were 35,400 new remortgages completed in the month, an increase of 11.3 per cent year-on-year. The value of this lending was £6bn, an 11.1 per cent increase on the same month the year before.
The buy-to-let market was less buoyant, with fewer loans arranged for house purchase. However buy-to-let remortgaging continued to increase.
The UK Finance figures show there were 5,200 new buy-to-let purchase mortgages completed in the month, 8.8 per cent fewer than the same month a year earlier. By value this was £0.7bn a 12.5 per cent decrease year-on-year.
In contrast there were 14,100 new buy-to-let remortgages completed in February, some 20.5 per cent more than the same month a year ago. By values with was £2.2bn of lending, a 15.8 per cent increase year-on-year.
UK Finance’s director of mortgage Jackie Bennett says: “Homebuyers have shaken off the winter blues with house purchase by first-time buying and home movers reaching their highest levels of February in over a decade.
“Remortgages are also up year-on-year as homeowners look to fix costs amid anticipation of further interest rates rises. Meanwhile the buy-to-let market continues to operate at stable buy subdued levels due in part to the impact of recent legislative and tax changes.”
But Octane Capital’s managing director Mark Posniak adds: “The sharp rise in buy-to-let remortgage activity reflect how landlords, especially amateur ones, are refinancing their portfolios simply to keep their heads above water.
“Yields have been decimated by the recent spate of tax and legislative changes, and for more geared landlords remortgaging is absolutely essential to maintaining a viable portfolio.”
Legal & General Mortgage Club’s head of lender relationships Danny Belton adds: “Activity within the mortgage market remained buoyant in February. The plethora of new products on the market combined with near record low rates is creating favourable conditions for buyers, giving them greater flexibility and choice. This is contributing to the increased lending we are seeing to first-time buyers.”