Remortgage activity dominated the mortgage market in June, according to new figures from UK Finance, as first-time buyer and homemover transactions fell.
There were 37,400 new homeowner remortgages completed in June, up 8.4 per cent more than in the same month a year earlier. The £6.8bn of remortgaging in the month was 13.3 per cent up year-on-year.
However, when it came to homemover completions, there were 33,700 new transactions carried out in the month, 7.9 per cent fewer than in the same month a year earlier. The £7.3bn of new lending in the month was 6.4 per cent down year-on-year.
In terms of FTBs, there were 34,900 new mortgages completed in the month, some 3.6 per cent fewer than in the same month a year earlier. The £5.8bn of new lending in the month was 1.7 per cent down year-on-year.
When it came to buy-to-let, there were 5,400 new buy-to-let home purchase mortgages completed in the month, some 19.4 per cent fewer than in the same month a year earlier. By value this was £0.8bn of lending in the month, 11.1 per cent down year-on-year
UK Finance director of mortgages Jackie Bennett says: “Remortgaging continued to dominate in June with figures up 13 per cent on the same period last year as existing two and three year products came to an end and borrowers opted for new deals.
“Despite a boost in recent months, speculation of a base rate rise saw the market remain relatively subdued with year-on-year declines in activity among both first time buyers and homemovers as customers adopted a ‘wait and see’ approach.
“House price inflation has moderated in recent months yet it still remains above earnings growth, and so affordability is still a challenge for would-be borrowers.
“And although the full impact has yet to be felt, tax and regulatory changes continue to bear down on borrowing activity in the buy-to-let purchase market.”
TMA senior product and business manager Rob McCoy says: “As expected, the market is still seeing a decrease in home movers and an increase in mortgaging activity. This is only set to intensify after the recent Bank of England rate rise as homeowners look to secure long-term fixed rates before any future rate increases are announced. As ever, advisers should be assisting their clients to source the best deals and lock in the most favourable rates.
“It is disappointing to note that product transfer figures have not been included in the report, despite recent efforts to make this data more transparent and readily available. It would be great to see this included in future reports.”