UK Finance’s Mortgage Trends Update for March 2018 has revealed a small increase in lending to first-time buyers compared to a year earlier, while remortgaging levels softened slightly after a busy start to the year.

Separate figures from the Bank of England show that gross mortgage lending in the first quarter of 2018 was £61.1 billion, up 3.4 per cent from £59.0 billion in the first quarter of 2017.

Key data highlights:

  • There was £5.1bn of new lending to first-time buyers in the month, up two per cent year-on-year. 31,200 new first-time buyer mortgages were completed in the month, some 1.9 per cent fewer than in the same month a year earlier. The average first-time buyer is 30 and has a gross household income of £42,000.
  • There was £6.1bn of new lending to homemovers in the month, 4.7 per cent down year-on-year. There were 28,400 new homemover mortgages completed in the month, some 7.8 per cent fewer than in the same month a year earlier. The average homemover is 39 and has a gross household income of £56,000.
  • The £5.6bn of remortgaging in the month was 9.7 per cent down year-on-year. There were 32,400 new homeowner remortgages completed in the month, some 12 per cent fewer than in the same month a year earlier.
  • There were 5,500 new buy-to-let home purchase mortgages completed in the month, some 19.1 per cent fewer than in the same month a year earlier. By value this was £0.8bn of lending in the month, 20 per cent down year-on-year. UK Finance research suggests the recent softening of the buy-to-let market is mostly down to a number of recent tax and regulatory changes including the limiting of landlords’ Mortgage Interest Tax Relief (MITR), the three per cent Stamp Duty Land Tax (SDLT) surcharge and new underwriting requirements introduced by the Prudential Regulatory Authority (PRA).
  • There were 12,600 new buy-to-let remortgages completed in the month, some 0.8 per cent more than in the same month a year earlier. By value this was £2.0bn of lending in the month, the same year-on-year.

Commenting on the data, Jackie Bennett, Director of Mortgages at UK Finance, said:

““Remortgaging levels softened in March, after a busier than usual start to the year saw customers locking into attractive deals ahead of a potential interest rate rise.

“There has been relatively flat growth in lending to first-time buyers, reflecting recent Bank of England figures showing a fall in mortgage approvals.

“Meanwhile the buy-to-let market remains subdued, as recent tax and regulatory changes continue to have an impact on demand.”

Ends

For more information please call the UK Finance press office on 020 7416 6750 or email press@ukfinance.org.uk

Notes to Editor   

  1. UK Finance is a trade association formed on 1 July 2017 to represent the finance and banking industry operating in the UK. It represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation brings together most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association
  2. The data shown is grossed up from the sample of lenders reporting to reflect total market size, based on total market volumes of Mortgage Product volumes of Mortgage Product Sales Data published by the FCA, so our historical figures are subject to revision as and when the FCA makes revisions to the market totals. The average figures shown are medians, as they tend to better represent the position of the typical borrower. Affordability measures are based on median averages of calculations for individual transactions. Capital & interest payment calculations only include mortgages taken out on a full capital and interest repayment basis and are calculated based on the reported repayment term, interest rate, loan amount and income for each transaction.
  3. Income metrics are presented on a gross household basis, as the sum of all income sources for all borrowers included in the affordability assessment.
  4. UK Finance research suggests the recent softening of the buy-to-let market is mostly down to a number of recent tax and regulatory changes including the limiting of landlords’ Mortgage Interest Tax Relief (MITR), the 3 per cent Stamp Duty Land Tax (SDLT) surcharge and new underwriting requirements introduced by the Prudential Regulatory Authority (PRA). Please see more details along with a chart showing buy-to-let house purchases and remortgaging since 2014 here.
  5. Bank of England statistics show that gross mortgage lending in the first quarter of 2018 was £61.1 billion, up 3.4 per cent from £59.0 billion in the first quarter of 2017.
  6. Bank of England statistics show there were 66,911 home purchase mortgage approvals in March 2018, 17 per cent lower than the same month a year earlier.
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Remortgaging market softens in March after busy start to year
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