Mortgage Market Activity Buoyant in November 2017

The latest mortgage trends figures from UK Finance, for November 2017, show steady increases in mortgage lending for first time buyers and home movers compared to the previous month and the equivalent period in 2016.

There were 34,800 new first time buyer mortgages in the month – 15.2% more than in November 2016. The £5.6 billion of new lending in the month was 16.7% more on an annual basis. The average first time buyer is 30-years-old and has an income of £40,000.

There were 36,200 new home mover mortgages in November – 16.8% higher than in the same month of 2016. The £7.5 billion of new lending was 19% more year-on-year. The average home mover is 39-years-old and has an income of £54,000.

During November, 38,400 new homeowner remortgages were approved – 8.5% more on an annual basis. The £6.5 billion of remortgaging was 10.2% more than in November of the previous year.

6,600 new buy-to-let mortgages were approved in the month – down by 1.5% on November 2016. By value, this was £0.9 billion – the same as 12 months previous.

There were 13,500 new buy-to-let remortgages in November – 3.6% fewer than in the same month a year earlier. By value, this was £2.1 billion – an annual decline of 4.5%.

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Mortgage Market Activity Buoyant in November 2017

Paul Smee, the Head of Mortgages at UK Finance, says: “The data shows housing market activity remains buoyant, despite November’s rise in the base rate. Steady increases in lending for house purchases, together with increases in homeowner remortgages, reflect a keenness among consumers to benefit from still historically low interest rates and a highly competitive marketplace.

“In contrast, declines in buy-to-let lending reflect the changing regulatory and fiscal environment for landlord businesses, where some landlords might be inclined to reappraise the viability of their portfolios.”

The Managing Director of UK-wide independent mortgage broker One 77 Mortgages, Alastair McKee, also comments: “This was the first month that an interest rate rise could have dampened the spirits of borrowers. But, instead of beating a retreat, they have taken the first hike in ten years as the starting gun on more to come.

“In fact, what the Bank has done is remove a lot of the apathy that had built up because rates have been so low for so long. People had started to take them for granted, and this has jolted borrowers into action.

“The result is that the feeding frenzy continues around a bait ball consisting of rates so cheap that mortgage repayments are still about as affordable as they’ve ever been.

“Just look at what has happened to loan-to-income ratios, which have seen only a meagre rise in the past 12 months. Compared with a year ago, the needle has barely moved, not just for homeowners, but for first time buyers as well.

“Mortgages peaked in October, but were still in rude health the following month after rate rise rhetoric made it perhaps the most easily predicted change in the Bank’s history.

“This all points to a goldilocks zone, which, despite big house price rises in recent years, will continue to support valuations, as buyers say a gradual goodbye to borrowing so cheap we will likely not see rates so low again in our lifetime.”

Shaun Church, the Director of mortgage broker Private Finance, also responds to the data: “After a multitude of initiatives and billions of pounds of spending, a 15% uplift in first time buyer mortgage lending could be a sign that Government measures to tackle the UK’s housing affordability crisis are starting to have a real impact.

“Following the announcement to cut Stamp Duty for the majority of first time buyers, we have reason to hope lending in this area will grow even further in the coming months, as the tax change starts to take full effect.

“Lenders will be seeking to capitalise on this by making their proposition to first time buyers as attractive and competitive as possible. Buyers ready to make their first step onto the housing ladder should be empowered by this competitive climate and ensure they make the most of the current low rate deals.”