News

Remortgage Lending Declines in October as Demand Remains Weak

Remortgage Lending Declines in October as Demand Remains Weak

Mortgage lending to first time buyers grew in October according to the Council of Mortgage Lenders (CML).  There was also an increase from September to October for home movers and buy to let but there was a decline in remortgaging.  The decline in remortgaging could be troubling for mortgage holders that have been moved to their lender’s standard variable rate (SVR) after their current mortgage deal ended.  Those with SVR’s will be at risk of facing a higher interest rate next year and possibly with little to no warning.  Experts have encouraged homeowners to prepare for the expected interest rate increases next year and seek a remortgage while rates are low.

The current standard base interest rate set by the Bank of England has remained unchanged since March 2009.  It is now at 0.5% and Monetary Policy Committee (MPC) members that have voted for increases in the past few months have been keen on a 0.25% increase to a new rate of 0.75%.

Hopeful home buyers have been returning to the housing market in stronger numbers as sellers have become more aggressive to gain buyers.  October volume of first time buyers increased by 12% over September and there was a 14% increase over October of last year.  There were 29,900 first time buyer loans in October.

October home mover loans amounted to 35,000 which was a 10% increase over September and 4% over October 2013.

Remortgaging in October amounted to 26,600 loans.  This was a 6% decrease from September and was 11% lower than the recorded level on October 2013.

Paul Smee, director general of the CML, said, “There have been fluctuations month to month but overall the market appears to be showing a positive direction of travel going into the new year.

“Stamp duty reform was long overdue and it is welcome that the tax has been changed. It will now be interesting to see how the market reacts; the new structure should be less of a barrier to mobility for those looking to get on the housing ladder or movers looking to switch homes.”

Obligation Free Remortgage Quotations

Get a Quote »