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House purchases at start of year best for a decade

Homeowner purchases in February reached their highest level for that month since 2007, according to UK Finance.

According to the trade body’s latest mortgage trends report there were 50,000 purchases in February 2018, when home movers and first-time buyers are combined.

The growth came from first-time buyers, with 25,200 of these mortgages completed in February 2018, which is 2.4 per cent more than in the same month a year earlier.

Meanwhile home mover mortgages remained flat at 24,800.

Jackie Bennett, director of mortgages at UK Finance, said: “Homebuyers have shaken off the winter blues, with 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.

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

Both average loan-to-value and loan-to-income multiple have remained stable over recent months for home movers and first-time buyers.

The average loan-to-value and loan-to-income multiple for first-time buyers in February was 84.3 per cent and 3.59 respectively while for home movers they were 72.3 per cent and 3.41.

Average loan sizes have increased for both types of buyer as house prices have increased, reaching £138,150 for first-time buyers and £179,800 for home movers.

There were also 35,400 homeowner remortgages completed in February, which was 11.3 per cent more than in February a year earlier. The £6bn of remortgaging in the month was 11.1 per cent more year-on-year.

But buy-to-let home purchase mortgages fell by 8.8 per cent, with 5,200 mortgages completed in the month.

There were also 14,100 buy-to-let remortgages completed in February, which was 20.5 per cent more than in the same month a year earlier.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Buyers and sellers are showing, once again, that those prepared to negotiate hard are still getting on with their lives, albeit at slightly softer price levels.

“Encouragingly, first-time buyers are taking advantage of the abolition of stamp duty announced at the end of 2017, as well as a more level playing field with buy-to-let investors, with the latter’s numbers noticeably shrinking as revealed in this report.

“Although it is sometimes tough for first-time buyers, many are showing that they would prefer to buy rather than rent, although clearly many have no option unless they have help from the Bank of Mum and Dad.

“Looking forward, we expect more of the same – no boom or bust but a steady market with realistic pricing.”

Source: FT Adviser

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Total UK homeowner purchases reach highest level in over 10 years

Homeowner house purchases reached 50,000 in February, the highest level for the month since 2007. The data, which combines both home movers and first-time buyers, comes from the latest study on mortgage trends by trade association UK Finance.

The report also found that mortgage lending for first-time buyers, home movers and remortgagers increased in February this year compared to the previous year, equating to £4bn in new lending. According to the study, there were 25,200 new first-time buyer mortgages completed in February 2018, up about 2.4 per cent from the same month in 2017.

“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,” said Jackie Bennett, director of mortgages at UK Finance. “Remortgages are also up year-on-year, as homeowners look to fix costs amid anticipation of further interest rate rises.”

The group’s analysis also shows that there were 35,400 new homeowner remortgages in February, an 11.3 per cent increase than in the same month last year. The resulting £6bn in remortgaging for the month was 11.1 per cent more year-on-year.

Commenting on the results, Craig McKinlay, sales and marketing director at Kensington Mortgages said: “Amidst the noise about the Bank of England’s next decision on interest rates, remortgaging levels continue to remain high as borrowers organise their finances before any potential rate rise. Prudent borrowers are now locking themselves into competitive mortgage deals that remain on offer through the mortgage market, whether it’s for two, three or five years.”

According to UK Finance’s analysis, despite a nearly nine per cent drop in the number of new buy-to-let house purchase mortgages this February compared to last year, there were 14,100 new buy-to-let remortgages completed in the month, an increase of 20.5 per cent from the same month in 2017.

“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,” said Shaun Church, director at mortgage broker Private Finance. “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.”

Source: City A.M.