Remortgaging boost continued in October, according to UK Finance

Non-seasonally adjusted data released by UK Finance today shows that the number and value of loans for remortgaging and for house purchases rose in October in comparison with a month ago and with the same period in 2016.

Capital and interest payments for new loans remain near record lows for both home movers and first-time buyers, reflecting a competitive mortgage marketplace.

Commenting on the data, UK Finance’s head of mortgage policy June Deasy said:

“Over the last year, the number of loans for remortgaging have been at record levels; this trend looks set to continue further as we head towards the end of 2017 and borrowers seek to take advantage of low interest rates.

“Mortgage repayments as a proportion of income still remain at or close to their historic low point, and despite the recent base rate rise we can expect monthly mortgage payments to remain affordable for the vast majority of borrowers.”

First-time buyers

First-time buyers borrowed £5.1 billion, up two per cent on the previous month and 13.3 per cent higher than in October 2016. There were 31,700 loans awarded, up 3.6 per cent on October and up 10.5 per cent on a year ago
Combined capital and interest payments as a percentage of income remained stable at 17.2 per cent, down 0.1 percentage points on September 2017 and down 0.4 percentage points compared with a year ago. The loan to value ratio rose slightly, with an increase of 0.6 percentage points on September.

Home movers

Home movers borrowed £7 billion, up 2.9 per cent on September and 18.6 per cent higher year-on-year There were 33,300 home movers, and increase of five per cent on September and a substantial 15.6 per cent on October 2016.
Average combined capital and interest payments also remained stable at 17.5 per cent of income, unchanged on the same month last year. The loan to income ratio rose slightly to 3.41, up from 3.38 a month earlier.

Remortgaging & buy-to-let

Home-owner remortgage activity totalled £7.3 billion, up 15.9 per cent on September and 17.7 per cent higher than a year ago. That corresponded to 41,100 remortgages, an increase of 16.1 per cent on September and a twelve-month change of 16.4 per cent.
Buy-to-let remortgaging totalled £2.4 billion, up 20 per cent on September 2017 and October 2016. Remortgaging now accounts for just over 70 per cent of all buy-to-let lending. There were 14,700 buy-to-let remortgages, up 20.5 per cent on last month – and a 21.5 per cent annual increase.
Gross buy-to-let lending for house purchasers totalled £900 million, unchanged on september 2017 and October 2016. That equated to 6,600 mortgages.

Table 1 – Number of loans for house purchase and remortgage

	House purchase			Remortgage
	FTBs	Movers	Buy-to-let	Home owners	Buy-to-let
October 2016	28,700	28,800	6,200	35,300	12,100
September 2017	30,600	31,700	6,200	35,400	12,200
October 2017	31,700	33,300	6,600	41,100	14,700
1 month change	3.6%	5.0%	6.5%	16.1%	20.5%
12 month change	10.5%	15.6%	6.5%	16.4%	21.5%

Table 2 – Value of loans for house purchase and remortgage (£ million)

	House purchase			Remortgage
	FTBs	Movers	Buy-to-let	Home owners	Buy-to-let
October 2016	4,500	5,900	900	6,200	2,000
September 2017	5,000	6,800	900	6,300	2,000
October 2017	5,100	7,000	900	7,300	2,400
1 month change	2.0%	2.9%	0.0%	15.9%	20.0%
12 month change	13.3%	18.6%	0.0%	17.7%	20.0%

Table 3 – First-time buyer affordability measures

	Loan size (£)	Income (£)	Loan-to-value	Loan-to-income	Interest payment as % of income	Capital and interest payment as % of income
October 2016	133,458	40,077	84.6%	3.56	8.8%	17.6%
September 2017	138,000	40,842	84.1%	3.61	8.0%	17.3%
October 2017	138,750	40,946	84.7%	3.60	8.0%	17.2%

Table 4 – Home-mover affordability measures

	Loan size (£)	Income (£)	Loan-to-value	Loan-to-income	Interest payment as % of income	Capital and interest payment as % of income
October 2016	171,995	55,000	72.1%	3.26	6.8%	17.6%
September 2017	180,000	55,652	72.4%	3.38	6.3%	17.5%
October 2017	179,494	55,000	72.4%	3.41	6.3%	17.5%