Re-mortgaging hits new peak but first-timers slow

Market already seeing signs of a slowdown before the EU referendum vote
Market already seeing signs of a slowdown before the EU referendum vote

Re-mortgage lending lifted to its strongest levels in seven years in July as home owners snapped up the cheap deals available, banks and building societies have reported.

But elsewhere there were signs of the market cooling, and the Council of Mortgage Lenders, which released the figures, said it is too early to tell how much of this is down to the vote to leave the EU.

Mortgage lending to first-time buyers plunged by nearly a fifth month-on-month in July. First-time buyers borrowed a total of £4.4 billion-worth of mortgages in July, marking a 19% drop off compared with June and 4% down on July 2015.

The figures also showed lending to home movers, at £6.2 billion, was down by 9% compared with June and a fall of 16% compared with July 2015.

Meanwhile, landlords borrowed £3 billion-worth of mortgages in July, which was up slightly by 3% month-on-month but down by 21% year-on-year.

The market was already seeing some signs of a slowdown before the EU referendum vote.

A stamp duty increase for buy-to-let (BTL) investors was imposed on April 1, and this prompted a rush of landlords snapping up properties before the deadline.

These purchases may otherwise have taken place later in the year.

Home owner re-mortgage activity in July bucked the cooling trend. Some £6 billion-worth of loans were taken out in July for re-mortgage purposes, up 7% on June and a 20% increase compared with a year ago.

Many mortgage lenders have been offering their cheapest ever rates in the low interest rate environment.