In early August UK Finance provided our UK-level picture of the mortgage market in Lending Trends, which showed that house purchase activity slowed in June, but that remortgaging activity remains high.

The national data points to the continued increase in remortgaging activity, with June's figures up 13 per cent on the same period last year, as borrowers opt for new fixed deals and lock in to the current historically low interest rates.

A more detailed picture of the mortgage market can be seen through our regional lending trends, which support a deeper understanding of the national picture by looking at the UK's separate regional markets and their distinct characteristics.

Our regional trends data and commentary for Q2 2018 shows that within the overall UK-wide picture there are more subtle variations in market activity.

Remortgaging

Across all markets, we see very strong levels of remortgaging: 9.5 per cent more in Northern Ireland; 17.1 per cent more in Wales; 9.5 per cent more in Scotland; and 16.9 per cent more in London, all compared to the same quarter last year. This is partly down to borrowers rolling off existing 2 and 3 year products and taking advantage of new deals, while locking-in to continued low interest rates.

First-Time Buyers

Looking at other metrics for these markets, we see first-time buyer activity is generally holding up but slowing to a degree in Scotland, Wales and London.  This is most likely because of consumer concerns about wage growth, and prospective buyers choosing to ?wait and see? the outcome of the negotiations on the UK's future relationship with the EU.  In contrast, the first-time buyer market in Northern Ireland is bucking the trend with consistent growth underpinned by excellent affordability. 

Home Movers

For London, Scotland and Wales, activity has slowed in recent months.  For the second quarter in a row Northern Ireland is up however, with 6.7 per cent more home mover mortgage completions against the same quarter last year.

The overall picture

So what does all this tell us?

For first-time buyers, the UK's regional markets are holding steady  while remortgaging is dominating the picture.  Transactions by second and later buyers are essential to the fluidity of the property market so the suppressed activity we are currently seeing in home mover mortgages for most markets could have the potential for concern.

There are points to note here for policymakers in the UK's devolved governments, and for the London Mayor and Assembly.  Keeping the housing and mortgage markets moving will need tailored policy responses and interventions that address both housing supply and demand challenges.

Schemes such as Help to Buy can address affordability challenges for buyers with low deposits, though it is due to end in March 2021.  To avoid the risk of potentially market-disrupting effects, greater certainty on their future is needed.  These schemes can however fuel demand-side pressure, which needs to be matched by new supply.  To date, the required balance has yet to be struck.

As it stands therefore, our national and regional trends data look set to show us this picture for some time to come, albeit with variations on a regional theme.