Remortgage market drives April lending rise: UK Finance

Gross mortgage lending rose by 13.3% annually to £20.4bn in April, driven by strong remortgaging figures, according to the latest UK Finance data.

Related topics:  Finance
Rozi Jones
25th May 2018
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" I also predict there will be a rebalancing of the market as buy-to-let activity diminishes further still, following stamp duty increases and tapering of tax relief "

The number of total mortgage approvals has also risen and is 11% higher, primarily driven by remortagage approvals which were almost 30% higher than a year earlier.

Eric Leenders, managing director of personal finance at UK Finance, said: “April saw steady growth in mortgage lending and approvals, following a slowdown in activity the previous month. This was driven by strong remortgaging levels, as borrowers locked into attractive deals amid expectations of a base rate rise."

Henry Woodcock, principal mortgage consultant at IRESS, commented: “An increase in gross mortgage lending appeared likely as the April RICS survey showed new buyer enquiries and agreed sales stabilising. Even though the sale of £1m-plus houses increased to a record high in England and Wales last year, some challenges remain in the mid and upper tiers of the market and in particular, falling house prices in London.

“There is still no clear consensus when the Bank of England might increase the base rate. However, following the ending of its Term Funding Scheme in February, lenders are going to need to find other sources of funding. Many industry commentators have said lenders will be forced to increase mortgage rates as the ‘cheap’ money provided by the scheme runs out. And there’s some evidence this is happening already. I expect this trend of slowly increasing lender rates will continue over the Summer months. I also predict there will be a rebalancing of the market as buy-to-let activity diminishes further still, following stamp duty increases and tapering of tax relief for landlords.

“The likely mortgage winners over the next few months could be first time buyers if the recent National Landlords Association survey proves true and landlords start to downsize their portfolios.”

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