April saw new homeowner mortgages up 36% and buy-to-let remortgages up 32.4% compared to the same month a year earlier, UK Finance has reported.
UK Finance has also published a blog analysing the factors driving this rise in remortgaging, including the large number of customers reaching the end of their mortgage deal rates and speculation that the Bank of England may raise interest rates.
There were 26,700 new first-time buyer mortgages completed in the month, some 3.5% more than in the same month a year earlier. The £4.4bn of new lending in the month was 4.8% more year-on-year. The average first-time buyer is 30 and has a gross household income of £42,000.
UK Finance said there were 25,100 new homemover mortgages completed in the month, some 4.2% fewer than in the same month a year earlier. The £5.4bn of new lending in the month was 3.6% down year-on-year. The average homemover is 39 and has a gross household income of £55,000.
There were 40,800 new homeowner remortgages completed in the month, some 36% more than in the same month a year earlier. The £7.5bn of remortgaging in the month was 44.2% more year-on-year.
In addition, there were 5,000 new buy-to-let home purchase mortgages completed in the month, some 5.7% fewer than in the same month a year earlier. By value this was £0.7bn of lending in the month, 12.5% down year-on-year.
Meanwhile, there were 14,300 new buy-to-let remortgages completed in the month, some 32.4% more than in the same month a year earlier. By value this was £2.3bn of lending in the month, 35.3% more year-on-year.
Jackie Bennett, director of mortgages at UK Finance, said: “Remortgaging activity bounced back to strong levels in April, as both homeowners and landlords put their house in order by locking into attractive fixed-rate deals ahead of an anticipated interest rate rise.
“This spike in remortgaging was also driven by a large number of short-term mortgage deal rates coming to an end, combined with increased efforts by lenders to contact their customers before their deal rate expires.
“The number of first-time buyers has grown year on year, outstripping the number of homemovers. This may reflect the impact of measures such as the recent stamp duty cut and the Help to Buy scheme that are focused on getting more people onto the housing ladder.”
Jon Hall, managing director at Masthaven, added: “It’s been an impressive quarter for lending. This growth can be largely attributed to the increasing number of first-time buyers who are now able to access the property ladder.
“This is testament to the number of solutions now available to this group of borrowers who were traditionally underserved by the market. However, more can still be done as more innovative products are developed. A large percentage of first-time buyers still rely on their family to access mortgages, though the process can be difficult and expensive.
“There is an opportunity to remove the obstacles from this route to lending and open up access to families who want to contribute to the house buying process. This will also aid in future-proofing market growth for this group of borrowers which should benefit the entire mortgage market.”