July surge in re-mortgages as owners race to beat rate rise

There were 46,900 new home owner re-mortgages completed in July, up by 23.1% on the same month a year earlier, figures from trade association UK Finance show.

In total, £8.7 billion-worth of re-mortgaging took place in July - a 26.1% increase year-on-year.

Following speculation about interest rate hikes over the summer, the Bank of England base rate increased from 0.5% to 0.75% in August, pushing up costs for some home owners on variable rate deals.

Jackie Bennett, director of mortgages at UK Finance, said: “The residential re-mortgaging market saw its strongest July in over a decade, as home owners pre-empted the latest Bank of England rate rise by locking into attractive fixed-rate deals.”

The figures also show there were 14,700 new buy-to-let remortgages completed in July, 7.3% more than in the same month a year earlier.

Meanwhile, 31,400 new first-time buyer mortgages were also handed out in July - 1% up on July 2017.

The average first-time buyer is 30 and has a gross household income of £42,000.

Ms Bennett said the “considerable” growth in buy-to-let re-mortgaging shows “that while recent tax and regulatory changes are impacting on new purchases, many existing landlords remain in the market”.

“The number of first-time buyers has returned to modest year-on-year growth.

“However, affordability remains a challenge for many prospective borrowers, underlining the importance of clarity over the future of schemes such as Help to Buy.”