According to the latest data and analysis from UK Finance, there were 50,500 new homeowner remortgages completed in October. This is a 23.2% rise against the same month a year earlier. The £9.2bn of remortgaging in the month was 22.7% more year-on-year.
FTB lending was also up, seeing an 8.2% year-on-year increase, while homemover figures were up by 4%.
Landlords remained cautious however, with buy-to-let lending largely subdued. Figures indicated that purchases were down 9% but remortgaging increasing by 5.4%.
Jackie Bennett, director of mortgages at UK Finance, said: "Remortgaging has reached its highest level in almost a decade, as homeowners take advantage of a competitive market and lock into attractive deals. This also reflects the large number of fixed rate mortgages coming to an end, which is expected to continue into 2019.
There has been relatively strong growth in the number of first-time buyers, with schemes such as Help to Buy providing vital support to those getting a foot on the housing ladder.
Meanwhile the buy-to-let market has seen a continued increase in remortgaging and a softening in home purchase activity, in line with ongoing trends in recent months.”
John Phillips, group operations director at Just Mortgages and Spicerhaart said: “Today’s UK’s Finance Mortgage Trends Report reveals the highest rate of remortgaging in a decade with a rise of 23.2% on last year confirming that remortgaging is the clear driving force in the mortgage market at the moment. Last month’s estimate showed a downturn in remortgaging and I was quite surprised as it was not what we have been seeing at Just Mortgages. These figures are much more of a reflection of what we are seeing in the market.
We can also see that home mover mortgages are up too, perhaps signalling that, now the initial reluctance to move amidst Brexit uncertainty is straight to waive slightly. There will probably be another dip in home mover activity as we go into 2019, but I think remortgaging will remain strong. There are lots of fixed-rate deals coming to an end, and people are keen to lock in good fixed rate deals now, before potential rate rises.
Also in tougher times, when purchasing is down, lots of brokers start to focus more on their remortgaging business, which they should be doing anyway, and that has almost certainly impacted on the rise.”
Mike Scott, chief property analyst at Yopa, the low fixed-fee estate agent, says: "UK Finance’s October figures continue the previous month’s positive trend. The number of mortgages completed was higher than in October 2017 for both first-time buyers (up 8.2 per cent) and home movers (up 4 per cent). There was even stronger growth in the number of remortgages completed, up 23.2 per cent on last year although this will have little impact on the housing market. Only buy-to-let mortgages fell, down 9 per cent, as the unfavourable tax changes continue to hit the investor market.
These figures confirm HMRC's data for the number of house sales in October, which also showed a year-on-year increase. The political uncertainty around Brexit has not hit sales activity and so the market seems well placed for an active start to the new year once the Christmas slowdown is over."
Richard Pike, Phoebus Software sales and marketing director, says “The number of remortgages in October is indicative of the upward trend we have seen over the last few months. As we know many deals were coming to an end and the cautiousness around Brexit is making people look closely at their finances to see where they can find longer-term stability. The number of long-term fixes has increased throughout the year, and there are plenty of great deals across the market. Until we have some sort of a resolution regarding our exit from the EU this trend for remortgaging, rather than moving up the ladder, is likely to continue.
However, once we know what is happening after the first quarter next year I am sure the market will start moving as people come to the realisation that we just have to get on with it, no matter what. There will be no more reason for the caution we have seen this year.”
Jonathan Harris, director of mortgage broker Anderson Harris, says: "Remortgaging is at a decade-high as borrowers, fuelled by continuing uncertainty around Brexit and the economy, take advantage of cheap rates. With the number of new purchases remaining subdued, lenders are focusing on where the business is and offering competitive deals to those coming off fixed-rate mortgages. This trend is set to continue into 2019.
Landlords are also remortgaging as they make their property portfolios work harder and squeeze out every bit of profit they can. First-time buyers are taking advantage of the lack of competition from landlords for smaller properties, such as one-bedroom flats, and we expect this to continue into next year."
John Eastgate, Sales and Marketing Director at OneSavings Bank says: “’Uncertainty’ must be the most over-used word of the moment, and it prevails in the housing market as concerns over the UK’s exit from the EU loom large for prospective homeowners and investors alike. That we are seeing any increase in first-time buyer lending at all is a testament to the sheer scale of pent up demand for housing and the ongoing attractiveness of Help to Buy. Even so, it is remortgaging driving the market onwards, as borrowers look to lock in affordable rates for the future and with swap rates seeming to point towards rates remaining low for the long term, they might have plenty of time to do so.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: "Though a little historic, these figures do reflect what we have been seeing on the high street - in other words, buyers and sellers are trying to find an accommodation on price, with affordability just as important as Brexit when it comes to decision making.
First-time buyers, in particular, are taking advantage of reduced competition from buy-to-let investors still compromised by recent tax and regulation changes.
Political shenanigans seem to be more of a preoccupation among buyers in the southeast than elsewhere. It remains to be seen how the turmoil of the past month or so plays out in the market but the signs are so far that early new year activity will continue in a relatively subdued manner, much as it has over the past few months."
