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Mortgage lending grew by 4.6 per cent to £21.4bn year-on-year in September, driven by an energetic remortgage sector, while buy-to-let (BTL) cooled, according to UK Finance data.

In the new loans market, the volume of first-time buyer mortgages grew 1.6 per cent to 291,000 in September 2019 over the same month in 2018. The value was up five per cent to £5.1bn, the banking trade body revealed.

The volume of homemover mortgages rose 1.8 per cent to 29,050 and value grew 5.4 per cent to £6.6bn.

In remortgages, the volume of loans with additional borrowing was up 5.9 per cent to 17,740 and value increase 5.1 per cent to £3.3bn, with the average additional amount borrowed was £50,000.

Remortgages with no additional borrowing grew eight per cent to 19,140 by volume and 9.4 per cent to £3.4bn by value.

However, the BTL sector dragged behind. The number of purchase mortgages dropped 3.5 per cent to 5,500 and the value was down 11.1 per cent to £800m.

BTL remortgages were flat at 12,900 by volume and by value at £2.2bn.

Strong set of figures

Industry watchers welcomed the generally positive picture.

Nick Chadbourne, chief executive at LMS, the conveyancing provider, said: “We’re starting to see a shift in the balance of power within this market. Lower rates on two-year deals have sparked competition between lenders, aiming to turn the heads of remortgagers. Our recent data shows that although five-year fixes remain the most popular product, purchases of two-year deals have surged.”

John Phillips, national operations director at broker Just Mortgages, said: “This is a strong set of figures, with both new loans and especially remortgages showing a big improvement on the same time last year.

“The eight per cent rise in pound-for-pound remortgages in particular is a welcome reversal of recent trends, where the increased prevalence of longer-term fixes has been driving down volumes.

“This is somewhat offset by the quite steep fall in new BTL mortgages – more than 11 per cent by value. There have been a number of changes to regulations in recent years, not to mention the impact of the stamp duty surcharge for BTL. It would not be surprising if this was deterring landlords from expanding their portfolios and putting new entrants off altogether,” Phillips added.

Written by: Liz Bury

Source: Your Money

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