UK Finance reveals December mortgage market growth

There were 29,490 new first-time buyer mortgages completed in December 2019, a 0.3% rise from the same month in 2018, according to new data published by UK Finance.

The latest figures also showed the number of home mover mortgages hit 29,400 during the final month of the year, reflecting an increase of 3.2% from December 2018.

TMA director of mortgage services, David Copland, suggested the figures highlighted the ‘continued buoyancy’ of the UK’s mortgage market.

“If the market is to continue its positive trajectory, however, more measures need to be put in place to stimulate growth, Copland said. “As yet, there has been no indication from the Government on what these measures could look like.

“Potential initiatives could include the removal of stamp duty for downsizers or launching a replacement scheme for Help to Buy. Taking the focus away from private landlords would also be welcomed, particularly since this group has felt the brunt of tax and regulatory changes over recent years.”

The latest UK Finance data revealed there were 16,820 new remortgages with additional borrowing during December, reflecting a 5.9% rise compared to the same month in 2018. For these remortgages, the average additional amount borrowed in December was £50,702.

The figures also showed there were 16,490 new pound-for-pound remortgages – those with no additional borrowing – during the final month of the year, which was 0.5% fewer than in December 2018.

“Remortgaging is clearly growing in popularity,” commented the CEO at equity release lender more2life, Dave Harris. “For older homeowners in particular, a lack of suitable, affordable housing and high stamp duty costs can make the idea of downsizing seem unattractive. Remortgaging, however, can allow them to renovate their existing home or adapt the property to suit their changing needs in retirement.

“Advisers play a hugely important role in ensuring that these borrowers are aware of all the options available to them. By looking holistically at a client’s finances, advisers can support and guide retirees to the best solution for their particular circumstances, so that they can adapt their homes to suit their needs in later life.”

In the buy-to-let (BTL) market, the UK Finance data also showed a 3.6% increase in December from the same month a year earlier, with 5,700 new BTL home purchases completed during the month.

There were also 13,300 remortgages in the BTL sector, which was 2.3% more than in the same month in 2018.

Keystone Property Finance CEO, David Whittaker, added: “The BTL sector has been buoyed in recent months, with falling rates and growing competition between lenders showing no signs of abating. However, increasing regulation in the market means some landlords and tenants are beginning to feel the strain.

“Changing tax relief rules, updated legalisation on energy efficiency standards and a range of additional regulatory policy changes coming into effect in 2020 means BTL investors are increasingly diversifying their portfolios and looking for lenders who have a flexible approach. The role of mortgage brokers has never been more important to help these BTL landlords navigate this shifting landscape and find the right mortgage for them.”

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