Best February for House Purchases Recorded in a Decade

Mortgage lending for first time buyers, home movers and remortgagors beat the winter blues in February, marking the highest level for the month since 2007, according to the latest mortgage trends update from UK Finance.

Total homeowner house purchases, which combine both home movers and first time buyers, reached 50,000 – the highest level for February in over a decade.

First time buyers

There were 25,200 new first time buyer mortgages completed in February 2018, some 2.4% more than in the same month of 2017. The £4 billion of new lending in the month was 2.6% more on an annual basis.

The average first time buyer is now 30-years-old with a gross household income of £41,000.

Homeowners

In February, 24,800 new home mover mortgages completed – the same as in February last year. The £5.3 billion of new lending was up by 1.9% year-on-year.

The average home mover is now 39and has a gross household income of £55,000.

There were 35,400 new homeowner remortgages in February – 11.3% more than in the same month of 2017. The £6 billion of remortgaging was 11.1% higher on an annual basis.

Best February for House Purchases Recorded in a Decade

Buy-to-let

5,200 new buy-to-let house purchase mortgages were completed in February, some 8.8% fewer than in the same month last year. By value, this was £0.7 billion of lending in the month – down by 12.5% over the past 12 months.

There were 14,100 new buy-to-let remortgages in the month – 20.5% more year-on-year. By value, this was £2.2 billion of lending – up by 15.8% annually.

Jackie Bennett, the Director of Mortgages at UK Finance, comments: “Homebuyers have shaken off the winter blues, with house purchases by first time buyers and home movers reaching their highest levels for February in over a decade.

“Remortgages are also up year-on-year, as homeowners look to fix costs amid anticipation of further interest rate rises.”

She adds: “Meanwhile, the buy-to-let market continues to operate at stable but subdued levels, due in part to the impact of recent legislative and tax changes.”

The Director of mortgage broker Private Finance, Shaun Church, also reacts to the figures: “Spring came early for the UK housing market, with a flurry of activity in February pushing total homeowner purchases to their highest rate since 2007.

“First time buyers are continuing to bolster the UK housing market, as Government initiatives to tackle generation rent – such as Help to Buy and Stamp Duty changes – are starting to take effect. Lenders are eager to get a slice of this revitalised market, and first time buyers should use this to their advantage to ensure they secure the most competitive mortgage deals.”

He continues: “Though the buy-to-let market has ground to a halt in light of recent tax changes and regulation, it is being propped up by remortgage activity, which has risen more than 20% since February 2017. Savvy landlords are increasingly looking to make their investments as lucrative as possible by curbing their mortgage costs.

“As an interest rate rise from the Bank of England is fast becoming a case of when, not if, homeowners due to remortgage should act now if they want to lock into the favourable deals currently on offer. A number of high street banks have already started upping their rates, and, while the increases are only small, over the long-term, snapping up a lower rate can add up to considerable savings.”

Written by Rose Jinks