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Remortgage Activity Up as Homeowners Stay Put
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Remortgage activity is continuing to grow as a proportion of overall mortgage business, as homeowners decide to stay put, according to the latest Financial Adviser Confidence Tracking (FACT) Index from Paragon, which is based on interviews with 201 mortgage intermediaries.
Intermediaries reported that remortgage activity for owner-occupiers accounted for the largest part of their businesses in the first quarter (Q1) 2018, representing 41% of total applications, up from 37% of business five years ago.
Over the same period, first time buyer mortgages have increased from 16% to 18% of intermediary business, with the greatest step change occurring immediately after the introduction of the Help to Buy scheme in April 2013.
However, next time buyer mortgages showed a sharp drop in Q1 2018, down to just 21% of intermediary business. This compares with a relatively consistent share, at between 23% and 24% of Q1 business in each year since 2013.
Buy-to-let business comprised 19% of all intermediary applications in Q1 2018, which is up slightly on the 18% recorded in Q1 2017, but down from 22% five years ago. Does this suggest that fewer landlords are investing in rental properties?
On average, intermediaries reported 22.3 mortgage introductions per office in Q1 2018, which has risen from 20.4 at the beginning of last year.
Mortgage customers continued to show a strong preference for fixed rate products at the start of this year, with an overwhelming nine out of ten (91%) opting for interest rate certainty.
Longer-term fixed rate mortgages again outshone shorter-term products, with intermediaries reporting that 46% of applications for fixed rate mortgages were for an initial term of five years or more, compared to 42% of applications with an initial term of two years or fewer.
John Heron, the Managing Director of Mortgages at Paragon, says: “Potential home movers are weighing their options carefully at the moment. Given the combination of first time buyer incentives focused on new build property and mixed news on house prices more generally, it appears that an increasing proportion of potential movers are opting to stay put for the time being and lock in an attractive interest rate through remortgaging.”
Are you more keen to remortgage your current property, rather than move home?
