Mortgage market softens in all major categories: UKF

UK Finance’s latest data reveals a softening mortgage market in terms of first-time buyers, homemovers and buy-to-let borrowers on a monthly and yearly basis.

The report shows that FTB completions were down 4.5 per cent on an annual basis, consisting of 29,400 new completions in September as compared to 30,800 a year ago. However, the total value for both this September and last September is the same – £5bn.

On a monthly basis, these figures compare to the 35,400 new FTB completions posted in August 2018 at a total value of £6bn – a drop of nearly 15 per cent in terms of numbers, and 16.6 per cent in value.

The report also details homemover numbers – in this case, there were 29,400 new homeowner completions in September of this year compared to 32,100 in September last year – a fall of 9.1 per cent. The drop in value is less startling, however – last month this number stood at £6.5bn as compared to £6.9 billion the year before, a fall of 5.8 per cent.

In August, there were 38,000 new homemover loans at a value of £8.5bn – fall of 22.6 per cent and 26.5 per cent, respectively.

Regarding homeowner remortgages, in September 2018 there were 35,600 completions, nearly the same as the number last year, which was 35,800. The values are also similar, with £6.4 billion posted this year versus the £6.5bn seen last year.

On a monthly basis this compares to 38,300 completions in August at a value of £6.8bn, giving a fall of 7 per cent and 5.9 per cent, respectively.

Meanwhile, buy-to-let purchases were at 5,200 last month against 6,400 last year – a fall of 18.8 per cent. In terms of value, this September stands at £700m, down from £900m last year. In August, there were 6,000 BTL purchases worth £800m.

Buy-to-let remortgage numbers also fell both yearly and monthly: There were 12,300 completions in September against 12,400 at the same time last year. However, in terms of value, both were at £2bn. The respective numbers for August 2018 were 13,800 completions at a value of £2.2bn.

SPF Private Clients chief executive Mark Harris says: “The UK Finance figures don’t appear to take into account product transfers, which will have a significant impact on remortgage numbers. This market is much larger today than 12 months ago as borrowers opt for the simpler process of sticking with the same lender and moving onto another rate, rather than starting a new application with another lender.”

Masthaven managing director Matt Andrews adds: “Following on from the notable growth in BTL remortgaging and FTB activity over the last year, it is interesting to note the BTL downturn which is rippling across the market. From tax alterations to regulatory updates, it seems the market is starting to see the effects of so many changes and when combined with flat house price growth, returns for BTL investors are a challenge.

“However, the gap in the market has given FTBs a bit of breathing space, with more properties up for grabs. With the extension of the HTB scheme and stamp duty cuts for shared ownership purchases announced in the Budget, the future is looking bright for FTBs.”

Recommended

Data-Corporate-Finance-Business-Pen-Graph-Growth-700x450.jpg

Summer remortgage market strongest in a decade: UKF

UK Finance’s latest Mortgage Trends Update reports that 23.1 per cent yearly growth in homeowner remortgages – a total of 46,900 completed – made for the strongest July in a decade. Figures from the Bank of England released yesterday, however, show that remortgaging as a proportion of new lending fell by 2.0 per cent on […]

stamp duty hike

Government opens consultation on second homes tax “loophole”

The government has launched a consultation on the business rates treatment of self-catering accommodation. There is a concern that some second home owners are valuing their properties for business rates by declaring their property as holiday accommodation and so qualifying for small business rate relief, which can reduce a property’s tax liability to zero if […]

Dubai

White paper — Dubai International Insights

Jelf Employee Benefits discusses the legislative changes in Dubai, available medical facilities and policy considerations for employers with expatriate workforces in the country. This edition will be of particular interest to global human resource directors, compensation and benefits specialists and mobility managers who have employee populations in Dubai, or are considering operating there in the near future.

Newsletter

News and expert analysis straight to your inbox

Sign up