Mortgage and remortgaging markets slow down

Written by Oliver Wade
16/05/2018

UK Finance’s Mortgage Trends Update for March 2018 revealed a slight increase in the lending to first-time buyers compared to a year earlier, while the remortgaging market slowed down.

Figures from the Bank of England also illustrated that gross mortgage lending in the first quarter of 2018 was £61.1bn, representing a 3.4% increase from the £59bn reported in Q1 2017.

The update from UK Finance also showed that lending to first-time buyers increased in March, up 2% year-on-year. There were 31,200 new first-time buyer mortgages completed in the month and, although the lending figure is higher than that of March 2017, this figure is 1.9% lower. The firm found that the average first-time buyer is 30 and has a gross household income of £42,000.

However, despite the lending figure for first-time buyers increasing, lending to homemovers experienced a decline of 4.7% year-on-year. The number of completed mortgages in March also fell among homemovers by 7.8% compared to a year earlier, representing 28,400. UK Finance revealed that the average homemover is 39 and has a gross household income of £56,000.

Remortgaging levels in March have felt a 9.7% dip year-on-yea, with 32,400 new homeowner remortgages completed in the month, 12% less than in March 2017.

In addition to this, the B2L market slowed down with just 5,500 new B2L mortgage deals completed in the month, which the firm has said is 19.1% fewer than in the same month a year earlier. This figure represents £800m worth of lending and a 20% year-on-year decline.

The research from UK Finance suggests that the “recent softening” of the B2L market is primarily caused by a number of recent tax and regulatory changes, such as the limiting of landlords’ mortgage interest tax relief (MITR) and the 3% stamp duty land tax surcharge.

UK Finance director of mortgages Jackie Bennett commented on the data, saying: “Remortgaging levels softened in March, after a busier than usual start to the year saw customers locking into attractive deals ahead of a potential interest rate rise.

“There has been relatively flat growth in lending to first-time buyers, reflecting recent Bank of England figures showing a fall in mortgage approvals.

“Meanwhile the buy-to-let market remains subdued, as recent tax and regulatory changes continue to have an impact on demand.”

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