Mortgage lending in February reaches highest level since 2007

Written by Oliver Wade
17/04/2018

Total homeowner house purchases, including first-time buyers and home movers, reached 50,000 in February, the highest levels recorded in February since 2007, according to UK Finance’s latest mortgage trends update.

There were 25,200 new first-time buyer mortgages completed in February 2018, 2.4% more than in February 2017, equating to £4bn worth of new lending and a 2.6% increase year-on-year. The average first-time buyer is 30 and has a gross household income of £41,000.

In the month, there were 24,800 new home mover mortgages completed, roughly the same as the previous year, but the £5.3bn worth of new lending represented a year-on-year increase of 1.9%, with the average home mover being 39 and having a gross household income of £55,000.

However, B2L mortgage levels declined by 8.8% in February compared to January, with 5,200 mortgages completed. This decline was further followed by a year-on-year fall of 12.5% and represented £0.7bn worth of lending.

UK Finance director of mortgages Jackie Bennett said: “Homebuyers have shaken off the winter blues, with house purchases by first-time buyers and home movers reaching their highest levels for February in over a decade.

“Remortgages are also up year-on-year, as homeowners look to fix costs amid anticipation of further interest rate rises.

“Meanwhile the buy-to-let market continues to operate at stable but subdued levels, due in part to the impact of recent legislative and tax changes.”

Despite the decline in new B2L mortgages, B2L remortgages saw a sharp increase in February of 20.5% compared to February 2017, resulting in £2.2bn worth of new lending and a 15.8% growth year-on-year.

Commenting on the B2L remortgage market, Octane Capital managing director Mark Posniak said: “The sharp rise in buy-to-let remortgage activity reflects 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.

"The ongoing schism in the buy-to-let market continues apace.

"Many amateur landlords are reducing their exposure or exiting the sector altogether, while professional, increasingly institutional landlords, are piling in because they have the financial strength, expertise and scaleability to make it work.”

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Adam Cadle talks to Vida Homeloans director of sales - mortgages Louisa Sedgwick about the specialist first time buyer and buy to let markets

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